Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited
financial results for its third quarter of fiscal year 2024.
“It's clear that Jabil has navigated a period of significant
transformation this fiscal year: a year in which we divested our
Mobility business, captured growth in the AI datacenter space, and
experienced softness across multiple end-markets,” said CEO Mike
Dastoor. “Despite these moving pieces, we remain on track to
deliver 5.6% in core margins and $8.40 of core diluted EPS in FY24,
while generating more than $1 billion in adjusted free cash flow.
At the same time, we’ve been working towards our commitment to
repurchase $2.5 billion of our shares. And importantly, in the
mid-to-longer-term we remain well-positioned to benefit from many
of the world’s powerful trends in areas like datacenter power and
cooling, electric and hybrid vehicles, healthcare and pharma
solutions, semi-cap equipment, and automated warehousing to name a
few,” he concluded.
Third Quarter of Fiscal Year 2024 Highlights:
• Net revenue: $6.8 billion
• U.S. GAAP operating income: $261
million
• U.S. GAAP diluted earnings per share:
$1.06
• Core operating income (Non-GAAP): $350
million
• Core diluted earnings per share
(Non-GAAP): $1.89
Fourth Quarter of Fiscal Year 2024 Outlook:
• Net revenue
$6.3 billion to $6.9 billion
• U.S. GAAP operating income
$285 million to $355 million
• U.S. GAAP diluted earnings per share
$1.40 to $1.88 per diluted share
• Core operating income (Non-GAAP)(1)
$365 million to $425 million
• Core diluted earnings per share
(Non-GAAP)(1)
$2.03 to $2.43 per diluted share
__________________
(1)
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
$18 million for stock-based compensation expense and related
charges (or $0.14 per diluted share) and $50 million to $40 million
(or $0.40 to $0.32 per diluted share) for restructuring, severance
and related charges.
Fiscal Year 2024 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
(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 third quarter of fiscal year
2024 and our guidance for future financial performance in our
fourth 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); and our full year 2024 (including net revenue,
core operating margin (Non-GAAP), core diluted earnings per share
(Non-GAAP) results and Adjusted Free Cash Flow (Non-GAAP)) and our
plans to repurchase stock. 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 third 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 third 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)
May 31, 2024
(unaudited)
August 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,457
$
1,804
Accounts receivable, net
3,382
3,647
Contract assets
1,121
1,035
Inventories, net
4,439
5,206
Prepaid expenses and other current
assets
1,494
1,109
Assets held for sale
—
1,929
Total current assets
12,893
14,730
Property, plant and equipment, net
2,963
3,137
Operating lease right-of-use asset
366
367
Goodwill and intangible assets, net
810
763
Deferred income taxes
129
159
Other assets
288
268
Total assets
$
17,449
$
19,424
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt
$
—
$
—
Accounts payable
5,398
5,679
Accrued expenses
5,929
5,515
Current operating lease liabilities
96
104
Liabilities held for sale
—
1,397
Total current liabilities
11,423
12,695
Notes payable and long-term debt, less
current installments
2,879
2,875
Other liabilities
331
319
Non-current operating lease
liabilities
285
269
Income tax liabilities
112
131
Deferred income taxes
143
268
Total liabilities
15,173
16,557
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,881
2,795
Retained earnings
5,632
4,412
Accumulated other comprehensive loss
(18
)
(17
)
Treasury stock, at cost
(6,219
)
(4,324
)
Total Jabil Inc. stockholders’ equity
2,276
2,866
Noncontrolling interests
—
1
Total equity
2,276
2,867
Total liabilities and equity
$
17,449
$
19,424
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except for per
share data)
(Unaudited)
Three months ended
Nine months ended
May 31, 2024
May 31, 2023
May 31, 2024
May 31, 2023
Net revenue
$
6,765
$
8,475
$
21,919
$
26,244
Cost of revenue
6,157
7,778
19,906
24,143
Gross profit
608
697
2,013
2,101
Operating expenses:
Selling, general and administrative
268
307
890
911
Research and development
9
8
29
25
Amortization of intangibles
12
7
27
24
Restructuring, severance and related
charges
55
—
252
45
Gain from the divestiture of
businesses
—
—
(944
)
—
Acquisition and divestiture related
charges
3
—
64
—
Operating income
261
375
1,695
1,096
Interest and other, net
60
69
197
204
Income before income tax
201
306
1,498
892
Income tax expense
72
73
248
229
Net income
129
233
1,250
663
Net income attributable to noncontrolling
interests, net of tax
—
—
—
—
Net income attributable to Jabil Inc.
$
129
$
233
$
1,250
$
663
Earnings per share attributable to the
stockholders of Jabil Inc.:
Basic
$
1.08
$
1.76
$
10.01
$
4.96
Diluted
$
1.06
$
1.72
$
9.86
$
4.86
Weighted average shares outstanding:
Basic
119.9
132.3
124.9
133.6
Diluted
121.7
135.1
126.9
136.4
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Nine months ended
May 31, 2024
May 31, 2023
Cash flows provided by operating
activities:
Net income
$
1,250
$
663
Depreciation, amortization, and other,
net
557
752
Gain from the divestiture of
businesses
(944
)
—
Change in operating assets and
liabilities, exclusive of net assets acquired
318
(367
)
Net cash provided by operating
activities
1,181
1,048
Cash flows provided by (used in) investing
activities:
Acquisition of property, plant and
equipment
(660
)
(860
)
Proceeds and advances from sale of
property, plant and equipment
115
180
Cash paid for business and intangible
asset acquisitions, net of cash
(90
)
(30
)
Proceeds from the divestiture of
businesses, net of cash
2,108
—
Other, net
(6
)
(28
)
Net cash provided by (used in) investing
activities
1,467
(738
)
Cash flows used in financing
activities:
Borrowings under debt agreements
1,895
3,556
Payments toward debt agreements
(1,987
)
(3,369
)
Payments to acquire treasury stock
(1,824
)
(442
)
Dividends paid to stockholders
(32
)
(34
)
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
(68
)
(36
)
Other, net
(4
)
(6
)
Net cash used in financing activities
(1,989
)
(304
)
Effect of exchange rate changes on cash
and cash equivalents
(6
)
(4
)
Net increase in cash and cash
equivalents
653
2
Cash and cash equivalents at beginning of
period
1,804
1,478
Cash and cash equivalents at end of
period
$
2,457
$
1,480
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
Nine months ended
May 31, 2024
May 31, 2023
May 31, 2024
May 31, 2023
Operating income (U.S. GAAP)
$
261
$
375
$
1,695
$
1,096
Amortization of intangibles
12
7
27
24
Stock-based compensation expense and
related charges
3
18
72
80
Restructuring, severance and related
charges(1)
55
—
252
45
Net periodic benefit cost
2
4
7
11
Business interruption and impairment
charges, net(2)
14
—
14
—
Gain from the divestiture of
businesses(3)
—
—
(944
)
—
Acquisition and divestiture related
charges(3)
3
—
64
—
Adjustments to operating income
89
29
(508
)
160
Core operating income
(Non-GAAP)
$
350
$
404
$
1,187
$
1,256
Net income attributable to Jabil Inc.
(U.S. GAAP)
$
129
$
233
$
1,250
$
663
Adjustments to operating income
89
29
(508
)
160
Net periodic benefit cost
(2
)
(4
)
(7
)
(11
)
Adjustments for taxes
14
11
51
32
Core earnings (Non-GAAP)
$
230
$
269
$
786
$
844
Diluted earnings per share (U.S. GAAP)
$
1.06
$
1.72
$
9.86
$
4.86
Diluted core earnings per share
(Non-GAAP)
$
1.89
$
1.99
$
6.20
$
6.18
Diluted weighted average shares
outstanding (U.S. GAAP & Non-GAAP)
121.7
135.1
126.9
136.4
__________________
(1)
Charges recorded during the three months and nine months ended May
31, 2024, related to the 2024 Restructuring Plan.
(2)
Charges recorded during the three months
and nine months ended May 31, 2024, related to costs associated
with product quality liabilities.
(3)
We completed the divestiture of our
mobility business and recorded a pre-tax gain of $944 million,
subject to certain post-closing adjustments that are still being
finalized. We incurred transaction and disposal costs in connection
with the sale of approximately $64 million during the nine months
ended May 31, 2024.
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
ADJUSTED FREE CASH
FLOW
(in millions)
(Unaudited)
Nine months ended
May 31, 2024
May 31, 2023
Net cash provided by operating
activities (U.S. GAAP)
$
1,181
$
1,048
Acquisition of property, plant and
equipment (“PP&E”)(1)
(660
)
(860
)
Proceeds and advances from sale of
PP&E(1)
115
180
Adjusted free cash flow
(Non-GAAP)
$
636
$
368
__________________
(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/20240620182688/en/
Investor Contact Adam Berry Senior Vice President,
Investor Relations and Communications Adam_Berry@jabil.com Media
Contact Timur Aydin Senior Director, Enterprise Marketing and
Communications Timur_Aydin@jabil.com
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