Why is GAAP EPS so much higher than core EPS this quarter?

U.S. GAAP operating income includes a $944 million gain from the divestiture of businesses, which is excluded from core operating income. This gain lifted GAAP diluted EPS to $7.31, compared with core diluted EPS (non-GAAP) of $1.68.

What does Jabil expect for the third quarter of fiscal 2024?

Jabil guided to net revenue of $6.2 billion to $6.8 billion, U.S. GAAP operating income of $221 million to $301 million, and U.S. GAAP diluted EPS of $0.82 to $1.38. Core operating income is expected to be $325 million to $385 million, and core diluted EPS $1.65 to $2.05. The GAAP guidance excludes certain post-closing adjustments tied to the Mobility divestiture.

What did management say about the longer-term outlook?

CEO Kenny Wilson said fiscal 2024 was always expected to be a transitional year, following the Mobility sale and cost-structure optimization. He said he is confident in expanding margins year over year and delivering core EPS of $10.65 in fiscal 2025.

How strong was cash generation in the first half of fiscal 2024?

For the six months ended February 29, 2024, net cash provided by operating activities was $666 million and adjusted free cash flow (non-GAAP) was $221 million. Cash and cash equivalents were $2,566 million at period end.

JBL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed March 15, 2024. Cited figures are marked; the original filing is the authoritative source.

Jabil Inc. reported preliminary, unaudited results for its second fiscal quarter of 2024, ended February 29, 2024, in a press release furnished as Exhibit 99.1.

Net revenue was $6.77 billion^a, and U.S. GAAP operating income was $1.13 billion. That GAAP figure includes a $944 million gain from the divestiture of businesses, which the company tied to the sale of its Mobility business. Core operating income (non-GAAP) was $338 million, and core diluted earnings per share (non-GAAP) was $1.68.

U.S. GAAP diluted EPS was $7.31^b. Restructuring, severance and related charges were $70 million in the quarter. For the third fiscal quarter of 2024, Jabil guided to net revenue of $6.2 billion to $6.8 billion, core operating income of $325 million to $385 million, and core diluted EPS of $1.65 to $2.05.

For full fiscal 2024, the company updated its outlook to net revenue of $28.5 billion^c, a core operating margin of 5.6%, core diluted EPS of $8.40, and adjusted free cash flow of more than $1 billion. Management said it expects revenue headwinds this year to be short-term and described fiscal 2024 as a transitional year. CEO Kenny Wilson also said he expects to expand margins year over year and deliver core EPS of $10.65 in fiscal 2025.

For the six months ended February 29, 2024, net cash provided by operating activities was $666 million^d and adjusted free cash flow (non-GAAP) was $221 million. Cash and cash equivalents were $2,566 million at period end, and notes payable and long-term debt, less current installments, were $2,878 million.

02—Key points

Key Highlights

Q2 FY2024 net revenue was $6.77 billion, compared with $8.13 billion in the prior-year quarter.
U.S. GAAP diluted EPS was $7.31, driven by a $944 million gain from the divestiture of businesses. Core diluted EPS (non-GAAP) was $1.68.
Core operating income (non-GAAP) was $338 million in Q2 FY2024, versus $391 million in Q2 FY2023.
Q3 FY2024 guidance calls for net revenue of $6.2 billion to $6.8 billion and core diluted EPS of $1.65 to $2.05.
Full-year FY2024 outlook: net revenue of $28.5 billion, core operating margin of 5.6%, core diluted EPS of $8.40, and adjusted free cash flow of more than $1 billion.
Management targets core diluted EPS of $10.65 for FY2025 and expects year-over-year margin expansion.
Q2 FY2024 included $70 million in restructuring, severance and related charges tied to the 2024 Restructuring Plan.

03—Questions

Frequently Asked Questions

Why is GAAP EPS so much higher than core EPS this quarter?
U.S. GAAP operating income includes a $944 million gain from the divestiture of businesses, which is excluded from core operating income. This gain lifted GAAP diluted EPS to $7.31, compared with core diluted EPS (non-GAAP) of $1.68.
What does Jabil expect for the third quarter of fiscal 2024?
Jabil guided to net revenue of $6.2 billion to $6.8 billion, U.S. GAAP operating income of $221 million to $301 million, and U.S. GAAP diluted EPS of $0.82 to $1.38. Core operating income is expected to be $325 million to $385 million, and core diluted EPS $1.65 to $2.05. The GAAP guidance excludes certain post-closing adjustments tied to the Mobility divestiture.
What is the full-year fiscal 2024 outlook?
Jabil updated its fiscal 2024 outlook to net revenue of $28.5 billion, a core operating margin of 5.6%, core diluted EPS of $8.40, and adjusted free cash flow of more than $1 billion. Management expects strong core operating margins and free cash flow for the year.
What did management say about the longer-term outlook?
CEO Kenny Wilson said fiscal 2024 was always expected to be a transitional year, following the Mobility sale and cost-structure optimization. He said he is confident in expanding margins year over year and delivering core EPS of $10.65 in fiscal 2025.
How strong was cash generation in the first half of fiscal 2024?
For the six months ended February 29, 2024, net cash provided by operating activities was $666 million and adjusted free cash flow (non-GAAP) was $221 million. Cash and cash equivalents were $2,566 million at period end.

04—Continue

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