Jabil JBL reported fourth-quarter fiscal 2020 earnings of 98 cents per share, which beat the Zacks Consensus Estimate by 48.5% and increased 11.4% year over year.
Revenues increased 11.1% year over year to $7.3 billion and beat the Zacks Consensus Estimate by 16.7%.
Jabil, Inc. Price, Consensus and EPS Surprise
Jabil, Inc. price-consensus-eps-surprise-chart | Jabil, Inc. Quote
Electronics Manufacturing Services (EMS) revenues accounted for 61% of total revenues and increased 8% year over year to $4.45 billion. Moreover, Diversified Manufacturing Services (DMS) revenues accounted for 39% of total revenues and improved 17% year over year to $2.85 billion.
Gross margin, on a GAAP basis, contracted 80 basis points (bps) year over year to 6.7%.
Core EBITDA margin contracted 60 bps on a year-over-year basis to 6%.
Operating expenses on a GAAP basis contracted 60 bps on a year-over-year basis to 4%. As a percentage of revenues, while selling, general and administrative (SG&A) expenses contracted 70 bps year over year to 3.5%, research & development (R&D) expenses remained unchanged on a year-over-year basis.
Non-GAAP core operating margin contracted 20 bps on a year-over-year basis to 3.5%.
Balance Sheet & Cash Flow
As of Aug 31, 2020, cash and cash equivalents were $1.39 billion compared with $763.3 million as of May 31, 2020.
In fourth-quarter fiscal 2020, Jabil repurchased approximately 763,000 million shares for $25 million, bringing total year-to-date repurchases to $215 million, as part of a two-year $600 million authorization announced in September 2019.
For first-quarter fiscal 2021, Jabil expects total revenues between $6.7 billion and $7.3 billion.
DMS revenues are forecast to be $3.8 billion, up 1% year over year. EMS revenues are forecast to be $3.2 billion, down nearly 15% year over year.
Core non-GAAP operating income is estimated to be $295-$335 million. The company’s core earnings are expected between $1.15 and $1.35 per share on a non-GAAP basis.
For fiscal 2021, revenues are expected to be around $26.5 billion with expected core margin of 4%.
DMS segment revenues are expected to be $14 billion with expected core margin of 4.5% for fiscal 2021.
Further, EMS segment revenues are expected to be $12.5 billion with core margin projected to be 3.5%.
The company’s core earnings are expected to be $4 per share on a non-GAAP basis.
Adjusted free cash flow is expected to be more than $600 million.
Zacks Rank & Stocks to Consider
Jabil currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Sanmina Corporation SANM, which sports a Zacks Rank #1 (Strong Buy), and Celestica, Inc. CLS and EPAM Systems, Inc. EPAM, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Sanmina Corporation, Celestica and EPAM Systems is currently pegged at 12%, 25.6% and 15.6%, respectively.
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