Jabil (JBL) reported a slight miss in its second-quarter earnings per share (EPS) and a notable shortfall in revenue, compared to Wall Street expectations. The company's stock tumbled by 9.47% as it also provided weaker-than-expected guidance for the third quarter of fiscal year 2024.
For the second quarter, Jabil posted an EPS of $1.68, just a cent below the analysts' estimate of $1.69. However, the revenue figure of $6.8 billion fell short of the consensus estimate of $6.97 billion. The company's CEO, Kenny Wilson, acknowledged the revenue headwinds expected to be short-term and expressed confidence in the company's resilience and ability to generate strong core operating margins and free cash flow in FY24.
Looking ahead, Jabil's guidance for the third quarter indicates an EPS range of $1.65 to $2.05, with the midpoint of $1.85 falling significantly below the consensus of $2.12. The projected revenue for the next quarter is between $6.2 billion and $6.8 billion, which also misses the consensus estimate of $7.37 billion by a wide margin.
Despite the current challenges, CEO Wilson remains optimistic about the future, citing the completion of the company's largest transaction with the mobility sale and the subsequent optimization of their cost structure. He anticipates the company will exit the fiscal year as a more streamlined entity, with opportunities to expand margins and deliver a core EPS of $10.65 for FY25.
Investors reacted negatively to the news, as reflected in the significant drop in Jabil's stock price. The company's performance and outlook suggest a period of adjustment as it navigates through the transitional phase of fiscal year 2024.