Shares of Jabil were soaring intraday Thursday following the company's optimistic forecast for fiscal 2025 earnings, reporting higher-than-expected results for the fourth quarter. The manufacturing solutions provider anticipates adjusted earnings per share (EPS) of $8.65 for the ongoing year, exceeding the previous year's $8.49 reported for fiscal 2024.
Analysts are projecting a normalized EPS of $8.62 for fiscal 2025 based on a survey conducted by Capital IQ. This optimism translated into an 11% surge in Jabil's share price during Thursday's trading session. Management has forecasted a revenue target of $27 billion for this fiscal year, a decline from the $28.88 billion reported for the year that concluded on August 31.
On average, analysts expect revenues to hit approximately $27.19 billion for fiscal 2025. The dip in top-line forecasts is attributed to Jabil's divestiture of its mobility business during fiscal 2024 and a strategic shift away from legacy networking segments, which together comprised $2.4 billion in revenue last year.
Chief Financial Officer Greg Hebard noted this during a conference call, stating that revenue is set to grow by 2.3% when adjustments for these shifts are considered. The mobility divestiture is anticipated to lead to reduced capital expenditures for this year, Hebard remarked. For the first quarter of fiscal 2025, Jabil is projecting revenue in the range of $6.3 billion to $6.9 billion, representing a decrease from the $8.39 billion in revenue achieved in the first quarter of fiscal 2024.
The non-GAAP EPS is estimated between $1.65 and $2.05, hinting at a decline from the previous year's EPS of $2.60. Analysts surveyed by Capital IQ have modeled for both revenue and adjusted EPS of $6.47 billion and $1.84, respectively. In the August quarter, fourth-quarter revenue fell to $6.96 billion, down from $8.46 billion the year prior, yet it surpassed analysts' expectations of $6.58 billion.
Adjusted EPS decreased to $2.30 from $2.45 year-over-year but exceeded the anticipated $2.22. The revenue growth was primarily driven by stronger-than-expected performances in connected devices, networking, and storage markets, as discussed by Hebard during the conference call. Moreover, Jabil announced a substantial $1 billion share buyback authorization on Thursday, indicating strong confidence in its financial health.
The company will transition to three operating segments—regulated industries, intelligent infrastructure, and connected living and digital commerce—instead of the previous two segments, a strategic realignment aimed at enhancing operational focus..