Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited
financial results for its second quarter of fiscal year 2024.
“Despite revenue headwinds this year, which are expected to be
short-term, I’m pleased with the resiliency of our model and our
team’s demonstrated ability to execute,” said CEO Kenny Wilson.
“Even under these conditions, we expect to deliver strong core
operating margins and free cash flow in FY24,” he added.
Second Quarter of Fiscal Year 2024 Highlights:
- Net revenue: $6.8 billion
- U.S. GAAP operating income: $1.1 billion
- U.S. GAAP diluted earnings per share: $7.31
- Core operating income (Non-GAAP): $338 million
- Core diluted earnings per share (Non-GAAP): $1.68
Third Quarter of Fiscal Year 2024 Outlook:
• Net revenue
$6.2 billion to $6.8 billion
• U.S. GAAP operating income (1)
$221 million to $301 million
• U.S. GAAP diluted earnings per share
(1)
$0.82 to $1.38 per diluted share
• Core operating income (Non-GAAP) (2)
$325 million to $385 million
• Core diluted earnings per share
(Non-GAAP) (2)
$1.65 to $2.05 per diluted share
_________________________
(1)
Excludes certain post-closing adjustments
associated with the divestiture of the Mobility business that are
expected to be finalized in the third quarter of fiscal year
2024.
(2)
Core operating income and core diluted
earnings per share exclude anticipated adjustments of $12 million
for amortization of intangibles (or $0.09 per diluted share) and
$17 million for stock-based compensation expense and related
charges (or $0.14 per diluted share) and $75 million to $55 million
(or $0.60 to $0.44 per diluted share) for restructuring, severance
and related charges.
Fiscal Year 2024 Updated Outlook:
• Net revenue
$28.5 billion
• Core operating margin (Non-GAAP)
5.6%
• Core diluted earnings per share
(Non-GAAP)
$8.40 per diluted share
• Adjusted free cash flow (Non-GAAP)
$1+ billion
“Fiscal year 24 was always going to be a transitional year for
Jabil, one in which we successfully completed the largest
transaction in the Company’s history with the mobility sale, and
the subsequent efforts by our teams to optimize our footprint and
cost structure for the go-forward Company,” said CEO Kenny Wilson.
“As I think about exiting this fiscal year as a more streamlined
Company, coupled with key opportunities across our diversified
end-market portfolio, I am confident in our ability to expand
margins year-on-year, while also delivering core EPS of $10.65 for
FY25,” he added.
(Definitions: “U.S. GAAP” means U.S. generally accepted
accounting principles. Jabil defines core operating income as U.S.
GAAP operating income less amortization of intangibles, stock-based
compensation expense and related charges, restructuring, severance
and related charges, distressed customer charges, loss on disposal
of subsidiaries, settlement of receivables and related charges,
impairment of notes receivable and related charges, goodwill
impairment charges, business interruption and impairment charges,
net, gain from the divestiture of businesses, acquisition and
divestiture related charges, plus other components of net periodic
benefit cost. Jabil defines core earnings as core operating income,
less loss on debt extinguishment, loss (gain) on securities, other
components of net periodic benefit cost, income (loss) from
discontinued operations, gain (loss) on sale of discontinued
operations and certain other expenses, net of tax and certain
deferred tax valuation allowance charges. Jabil defines core
diluted earnings per share as core earnings divided by the weighted
average number of outstanding diluted shares as determined under
U.S. GAAP. Jabil defines adjusted free cash flow as net cash
provided by (used in) operating activities less net capital
expenditures (acquisition of property, plant and equipment less
proceeds and advances from sale of property, plant and equipment).
Jabil reports core operating income, core earnings, core diluted
earnings per share and adjusted free cash flow to provide investors
an additional method for assessing operating income, earnings,
diluted earnings per share and free cash flow from what it believes
are its core manufacturing operations. See the accompanying
reconciliation of Jabil’s core operating income to its U.S. GAAP
operating income, its calculation of core earnings and core diluted
earnings per share to its U.S. GAAP net income and U.S. GAAP
earnings per share and additional information in the supplemental
information.)
Forward Looking Statements: This release contains
forward-looking statements, including those regarding our
anticipated financial results for our second quarter of fiscal year
2024 and our guidance for future financial performance in our third
quarter of fiscal year 2024 (including, net revenue, U.S. GAAP
operating income, U.S. GAAP diluted earnings per share, core
operating income (Non-GAAP), core diluted earnings per share
(Non-GAAP) results and the components thereof, including but not
limited to amortization of intangibles, stock-based compensation
expense and related charges and restructuring, severance and
related charges); our full year 2024 (including net revenue, core
operating margin (Non-GAAP), core diluted earnings per share
(Non-GAAP) results, the components thereof and Adjusted Free Cash
Flow (Non-GAAP)); our full year 2025 (including, margins and core
earnings per share) and our plans to reduce costs. The statements
in this release are based on current expectations, forecasts and
assumptions involving risks and uncertainties that could cause
actual outcomes and results to differ materially from our current
expectations. Such factors include, but are not limited to: our
determination as we finalize our financial results for our second
quarter of fiscal year 2024 that our financial results and
conditions differ from our current preliminary unaudited numbers
set forth herein; unexpected costs or unexpected liabilities that
may arise from the Mobility transaction; scheduling production,
managing growth and capital expenditures and maximizing the
efficiency of our manufacturing capacity effectively; managing
rapid declines or increases in customer demand and other related
customer challenges that may occur; the effect of COVID-19 on our
operations, sites, customers and supply chain; our dependence on a
limited number of customers; our ability to purchase components
efficiently and reliance on a limited number of suppliers for
critical components; risks arising from relationships with emerging
companies; changes in technology and competition in our industry;
our ability to introduce new business models or programs requiring
implementation of new competencies; competition; transportation
issues; our ability to maintain our engineering, technological and
manufacturing expertise; retaining key personnel; risks associated
with international sales and operations, including geopolitical
uncertainties; energy price increases or shortages; our ability to
achieve expected profitability from acquisitions; risk arising from
our restructuring activities; issues involving our information
systems, including security issues; regulatory risks (including the
expense of complying, or failing to comply, with applicable
regulations; risk arising from design or manufacturing defects;
risk arising from compliance, or failure to comply, with
environmental, health and safety laws or regulations and
intellectual property risk); financial risks (including customers
or suppliers who become financially troubled; turmoil in financial
markets; tax risks; credit rating risks; risks of exposure to debt;
currency fluctuations; and asset impairment); changes in financial
accounting standards or policies; risk of natural disaster, climate
change or other global events; and risks arising from expectations
relating to environmental, social and governance considerations.
Additional factors that could cause such differences can be found
in our Annual Report on Form 10-K for the fiscal year ended August
31, 2023 and our other filings with the Securities and Exchange
Commission. We assume no obligation to update these forward-looking
statements.
Supplemental Information Regarding Non-GAAP Financial
Measures: Jabil provides supplemental, non-GAAP financial
measures in this release to facilitate evaluation of Jabil’s core
operating performance. These non-GAAP measures exclude certain
amounts that are included in the most directly comparable U.S. GAAP
measures, do not have standard meanings and may vary from the
non-GAAP financial measures used by other companies. Management
believes these “core” financial measures are useful measures that
facilitate evaluation of the past and future performance of Jabil’s
ongoing operations on a comparable basis.
Jabil reports core operating income, core earnings, core diluted
earnings per share and adjusted free cash flows to provide
investors an additional method for assessing operating income,
earnings, earnings per share and free cash flow from what it
believes are its core manufacturing operations. Among other uses,
management uses non-GAAP financial measures to make operating
decisions, assess business performance and as a factor in
determining certain employee performance when determining incentive
compensation.
The Company determines an annual normalized tax rate
(“normalized core tax rate”) for the computation of the non-GAAP
(core) income tax provision to provide better consistency across
reporting periods. In estimating the normalized core tax rate
annually, the Company utilizes a full-year financial projection of
core earnings that considers the mix of earnings across tax
jurisdictions, existing tax positions, and other significant tax
matters. The Company may adjust the normalized core tax rate during
the year for material impacts from new tax legislation or material
changes to the Company’s operations.
Detailed definitions of certain of the core financial measures
are included above under “Definitions” and a reconciliation of the
disclosed core financial measures to the most directly comparable
U.S. GAAP financial measures is included under the heading
“Supplemental Data” at the end of this release.
Meeting and Replay Information: Jabil will hold a
conference call today at 8:30 a.m. ET to discuss its earnings for
the second quarter of fiscal year 2024. To access the live audio
webcast and view the accompanying slide presentation, visit the
Investor Relations section of Jabil’s website, located at
https://investors.jabil.com. An archived replay of the webcast will
also be available after completion of the call.
About Jabil: At Jabil (NYSE: JBL), we are proud to be a
trusted partner for the world's top brands, offering comprehensive
engineering, manufacturing, and supply chain solutions. With over
50 years of experience across industries and a vast network of over
100 sites worldwide, Jabil combines global reach with local
expertise to deliver both scalable and customized solutions. Our
commitment extends beyond business success as we strive to build
sustainable processes that minimize environmental impact and foster
vibrant and diverse communities around the globe. Discover more at
www.jabil.com.
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions)
February 29, 2024
(unaudited)
August 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,566
$
1,804
Accounts receivable, net
2,648
3,647
Contract assets
1,086
1,035
Inventories, net
4,821
5,206
Prepaid expenses and other current
assets
1,349
1,109
Assets held for sale
—
1,929
Total current assets
12,470
14,730
Property, plant and equipment, net
3,045
3,137
Operating lease right-of-use asset
363
367
Goodwill and intangible assets, net
823
763
Deferred income taxes
131
159
Other assets
291
268
Total assets
$
17,123
$
19,424
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt
$
—
$
—
Accounts payable
5,041
5,679
Accrued expenses
5,548
5,515
Current operating lease liabilities
102
104
Liabilities held for sale
—
1,397
Total current liabilities
10,691
12,695
Notes payable and long-term debt, less
current installments
2,878
2,875
Other liabilities
374
319
Non-current operating lease
liabilities
272
269
Income tax liabilities
110
131
Deferred income taxes
140
268
Total liabilities
14,465
16,557
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,877
2,795
Retained earnings
5,512
4,412
Accumulated other comprehensive loss
(17
)
(17
)
Treasury stock, at cost
(5,714
)
(4,324
)
Total Jabil Inc. stockholders’ equity
2,658
2,866
Noncontrolling interests
—
1
Total equity
2,658
2,867
Total liabilities and equity
$
17,123
$
19,424
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except for per
share data)
(Unaudited)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Net revenue
$
6,767
$
8,134
$
15,154
$
17,769
Cost of revenue
6,137
7,473
13,749
16,365
Gross profit
630
661
1,405
1,404
Operating expenses:
Selling, general and administrative
308
285
622
604
Research and development
10
8
20
17
Amortization of intangibles
9
9
15
17
Restructuring, severance and related
charges
70
—
197
45
Gain from the divestiture of
businesses
(944
)
—
(944
)
—
Acquisition and divestiture related
charges
46
—
61
—
Operating income
1,131
359
1,434
721
Interest and other, net
69
72
137
135
Income before income tax
1,062
287
1,297
586
Income tax expense
135
80
176
156
Net income
927
207
1,121
430
Net income attributable to noncontrolling
interests, net of tax
—
—
—
—
Net income attributable to Jabil Inc.
$
927
$
207
$
1,121
$
430
Earnings per share attributable to the
stockholders of Jabil Inc.:
Basic
$
7.41
$
1.55
$
8.80
$
3.21
Diluted
$
7.31
$
1.52
$
8.66
$
3.14
Weighted average shares outstanding:
Basic
125.2
133.6
127.4
134.2
Diluted
126.9
136.3
129.5
137.1
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Six months ended
February 29, 2024
February 28, 2023
Cash flows provided by operating
activities:
Net income
$
1,121
$
430
Depreciation, amortization, and other,
net
356
514
Gain from the divestiture of
businesses
(944
)
—
Change in operating assets and
liabilities, exclusive of net assets acquired
133
(364
)
Net cash provided by operating
activities
666
580
Cash flows provided by (used in) investing
activities:
Acquisition of property, plant and
equipment
(554
)
(637
)
Proceeds and advances from sale of
property, plant and equipment
109
169
Cash paid for business and intangible
asset acquisitions, net of cash
(93
)
—
Proceeds from the divestiture of
businesses, net of cash
2,108
—
Other, net
(12
)
(16
)
Net cash provided by (used in) investing
activities
1,558
(484
)
Cash flows used in financing
activities:
Borrowings under debt agreements
1,799
2,021
Payments toward debt agreements
(1,866
)
(2,070
)
Payments to acquire treasury stock
(1,325
)
(288
)
Dividends paid to stockholders
(22
)
(23
)
Net proceeds from exercise of stock
options and issuance of common stock under employee stock purchase
plan
31
27
Treasury stock minimum tax withholding
related to vesting of restricted stock
(67
)
(36
)
Other, net
(5
)
(2
)
Net cash used in financing activities
(1,455
)
(371
)
Effect of exchange rate changes on cash
and cash equivalents
(7
)
(3
)
Net increase (decrease) in cash and cash
equivalents
762
(278
)
Cash and cash equivalents at beginning of
period
1,804
1,478
Cash and cash equivalents at end of
period
$
2,566
$
1,200
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP
FINANCIAL RESULTS TO NON-GAAP MEASURES
(in millions, except for per
share data)
(Unaudited)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Operating income (U.S. GAAP)
$
1,131
$
359
$
1,434
$
721
Amortization of intangibles
9
9
15
17
Stock-based compensation expense and
related charges
23
20
69
62
Restructuring, severance and related
charges(1)
70
—
197
45
Net periodic benefit cost
3
3
5
7
Gain from the divestiture of
businesses
(944
)
—
(944
)
—
Acquisition and divestiture related
charges
46
—
61
—
Adjustments to operating income
(793
)
32
(597
)
131
Core operating income
(Non-GAAP)
$
338
$
391
$
837
$
852
Net income attributable to Jabil Inc.
(U.S. GAAP)
$
927
$
207
$
1,121
$
430
Adjustments to operating income
(793
)
32
(597
)
131
Net periodic benefit cost
(3
)
(3
)
(5
)
(7
)
Adjustments for taxes
82
20
37
21
Core earnings (Non-GAAP)
$
213
$
256
$
556
$
575
Diluted earnings per share (U.S. GAAP)
$
7.31
$
1.52
$
8.66
$
3.14
Diluted core earnings per share
(Non-GAAP)
$
1.68
$
1.88
$
4.30
$
4.19
Diluted weighted average shares
outstanding (U.S. GAAP & Non-GAAP)
126.9
136.3
129.5
137.1
_________________________
(1)
Charges recorded during the three
months and six months ended February 29, 2024, related to the 2024
Restructuring Plan.
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
ADJUSTED FREE CASH
FLOW
(in millions)
(Unaudited)
Six months ended
February 29, 2024
February 28, 2023
Net cash provided by operating
activities (U.S. GAAP)
$
666
$
580
Acquisition of property, plant and
equipment (“PP&E”)(1)
(554
)
(637
)
Proceeds and advances from sale of
PP&E(1)
109
169
Adjusted free cash flow
(Non-GAAP)
$
221
$
112
_________________________
(1)
Certain customers co-invest in PP&E with us. As we acquire
PP&E, we recognize the cash payments in acquisition of
PP&E. When our customers reimburse us and obtain control, we
recognized the cash receipts in proceeds and advances from the sale
of PP&E.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240315498144/en/
Investor Contact Adam Berry Vice President, Investor
Relations Adam_Berry@jabil.com
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