Why did reported earnings rise sharply for the nine months while quarterly results declined?

Nine-month U.S. GAAP net income was $1,250 million, versus $663 million, and diluted EPS was $9.86, versus $4.86. The filing attributes this largely to a $944 million pre-tax gain from the divestiture of the Mobility business. Third-quarter U.S. GAAP operating income fell to $261 million from $375 million, and diluted EPS fell to $1.06 from $1.72.

How did core profitability compare with the prior year?

Core operating income (non-GAAP) was $350 million for the quarter, versus $404 million, and $1,187 million for the nine months, versus $1,256 million. Core diluted EPS was $1.89 for the quarter, versus $1.99. For the nine months, core diluted EPS was $6.20, versus $6.18.

What does Jabil expect for the fourth quarter and full fiscal 2024?

For Q4 FY2024, Jabil expects net revenue of $6.3 billion to $6.9 billion, U.S. GAAP operating income of $285 million to $355 million, and core operating income of $365 million to $425 million. Core diluted EPS is expected at $2.03 to $2.43. For full FY2024, the company expects 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.

What is the company doing with its capital?

Management says it is working toward its commitment to repurchase $2.5 billion of its shares. Payments to acquire treasury stock were $1,824 million for the nine months, versus $442 million in the prior-year period. Cash and cash equivalents were $2,457 million at May 31, 2024, up from $1,804 million at August 31, 2023.

Could the reported figures change?

Yes. The results are preliminary and unaudited. The filing states that the company's determination as it finalizes third-quarter results could differ from the current numbers. The Mobility divestiture gain is also subject to certain post-closing adjustments that are still being finalized.

JBL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed June 20, 2024. Cited figures are marked; the original filing is the authoritative source.

Jabil Inc. reported preliminary, unaudited results for its third fiscal quarter ended May 31, 2024, in a press release furnished as Exhibit 99.1.

Net revenue was $6.8 billion^a ($6,765 million), compared with $8,475 million in the prior-year quarter. U.S. GAAP operating income was $261 million, down from $375 million, and U.S. GAAP diluted EPS was $1.06, versus $1.72. Core operating income (non-GAAP) was $350 million, versus $404 million, and core diluted EPS was $1.89, versus $1.99.

CEO Mike Dastoor said the year included the divestiture of the Mobility business, growth in the AI datacenter space, and softness across multiple end-markets. For the nine months, net income was $1,250 million^b, compared with $663 million, and U.S. GAAP diluted EPS was $9.86, versus $4.86. These results include a pre-tax gain of $944 million from the divestiture of the Mobility business, which the filing notes is subject to certain post-closing adjustments still being finalized.

Core diluted EPS for the nine months was $6.20^c, versus $6.18. Restructuring, severance and related charges were $252 million for the nine months. Adjusted free cash flow (non-GAAP) was $636 million, versus $368 million.

Cash and cash equivalents were $2,457 million^d at May 31, 2024. For the fourth quarter of fiscal 2024, Jabil guided to net revenue of $6.3 billion to $6.9 billion, core operating income of $365 million to $425 million, and core diluted EPS of $2.03 to $2.43. For full fiscal 2024, it expects 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 says it is working toward its commitment to repurchase $2.5 billion of its shares. The company cautions that its final third-quarter results may differ from these preliminary figures.

02—Key points

Key Highlights

Q3 FY2024 net revenue was $6,765 million, down from $8,475 million in the prior-year quarter; U.S. GAAP operating income was $261 million, versus $375 million.
Q3 core operating income (non-GAAP) was $350 million, versus $404 million, and core diluted EPS was $1.89, versus $1.99.
Nine-month U.S. GAAP diluted EPS of $9.86 includes a $944 million pre-tax gain from the Mobility business divestiture, which remains subject to post-closing adjustments.
Q4 FY2024 guidance: net revenue of $6.3 billion to $6.9 billion and core diluted EPS of $2.03 to $2.43 per diluted share.
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 $1+ billion.
Nine-month adjusted free cash flow (non-GAAP) was $636 million, versus $368 million, and treasury stock purchases were $1,824 million, versus $442 million.
Results are preliminary and unaudited, and the company states its final third-quarter results may differ from these figures.

03—Questions

Frequently Asked Questions

Why did reported earnings rise sharply for the nine months while quarterly results declined?
Nine-month U.S. GAAP net income was $1,250 million, versus $663 million, and diluted EPS was $9.86, versus $4.86. The filing attributes this largely to a $944 million pre-tax gain from the divestiture of the Mobility business. Third-quarter U.S. GAAP operating income fell to $261 million from $375 million, and diluted EPS fell to $1.06 from $1.72.
How did core profitability compare with the prior year?
Core operating income (non-GAAP) was $350 million for the quarter, versus $404 million, and $1,187 million for the nine months, versus $1,256 million. Core diluted EPS was $1.89 for the quarter, versus $1.99. For the nine months, core diluted EPS was $6.20, versus $6.18.
What does Jabil expect for the fourth quarter and full fiscal 2024?
For Q4 FY2024, Jabil expects net revenue of $6.3 billion to $6.9 billion, U.S. GAAP operating income of $285 million to $355 million, and core operating income of $365 million to $425 million. Core diluted EPS is expected at $2.03 to $2.43. For full FY2024, the company expects 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.
What is the company doing with its capital?
Management says it is working toward its commitment to repurchase $2.5 billion of its shares. Payments to acquire treasury stock were $1,824 million for the nine months, versus $442 million in the prior-year period. Cash and cash equivalents were $2,457 million at May 31, 2024, up from $1,804 million at August 31, 2023.
Could the reported figures change?
Yes. The results are preliminary and unaudited. The filing states that the company's determination as it finalizes third-quarter results could differ from the current numbers. The Mobility divestiture gain is also subject to certain post-closing adjustments that are still being finalized.

04—Continue

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