Jabil's stock rises on restructuring plan, earnings beat

By Steve Gelsi

Manufacturing specialist to take up to $200 million in restructuring charges for a head-count reduction, with more details to come

Jabil Inc.'s stock was up 13% Thursday after the industrial company topped analyst expectations for fourth-quarter profit and revenue and also disclosed up to $200 million in restructuring costs for head-count reductions in its manufacturing units.

Jabil (JBL) was one of the top gainers on the S&P 500 SPX on Thursday. The gains were strong enough to wipe out a year-to-date percentage loss in Jabil's stock price prior to today's trading.

Jabil did not disclose how many employees it plans to lay off but said it has faced "challenges in multiple end-markets." It said it expects to take restructuring costs of $150 million to $200 million for the action.

The St. Petersburg, Fla.-based engineering, manufacturing and supply-chain specialist said its net income for the three months that ended Aug. 31 fell to $138 million, or $1.18 a share, from $155 million, or $1.15 a share, in the year-ago quarter.

The company's adjusted fourth-quarter earnings of $2.30 a share were well ahead of the FactSet consensus estimate of $2.22 a share.

Revenue fell to $6.96 billion from $8.46 billion after Jabil sold its Mobility business, but still beat the analyst estimate of $6.59 billion.

Looking ahead, Jabil expects first-quarter earnings of $1.65 to $2.05 a share, while analysts expect earnings of $1.83 a share.

Jabil also approved a $1 billion stock-buyback program.

Prior to Thursday's trading, Jabil's stock had fallen 11% in 2024, compared with a 20% gain by the S&P 500 SPX. It's now showing a slim gain of 0.8% this year.

-Steve Gelsi

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09-26-24 1021ET

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