Shares of Jabil surged during trading on Wednesday after the manufacturing solutions provider reported smaller-than-expected declines in its fiscal first-quarter results while raising its outlook for 2025. The company's revenue decreased to $6.99 billion for the three months ending November 30, down from $8.39 billion the previous year.
However, this figure exceeded the average analyst estimate of $6.61 billion on FactSet. Adjusted earnings per share fell to $2 from $2.60 while analysts had initially estimated $1.88. The results surpassed the company's initial expectations due to "incremental strength in our cloud, data center infrastructure, and digital commerce end-markets," stated Chief Executive Mike Dastoor.
Following the news, shares of Jabil jumped by 8.8%. In its regulated industries segment, Jabil experienced a 7% year-over-year decline in revenue, while sales in intelligent infrastructure saw a 5% increase. Conversely, connected living and digital commerce sales plummeted by 46%. Notably, the company divested its mobility business in December 2023.
Dastoor commented on the connected living division, which primarily focuses on consumer-oriented devices, saying it "remains under pressure," during a conference call with analysts, referring to a transcript from FactSet. Nonetheless, the company remains "bullish" on its digital commerce operations, bolstered by the automation trends in the retail and warehouse sectors.
Looking ahead, Jabil is now projecting full-year revenue of $27.3 billion, an increase from its previous guidance of $27 billion, which was provided in September. The company's non-GAAP EPS is projected to reach $8.75, slightly up from the earlier estimate of $8.65. Analysts polled by FactSet anticipate fiscal 2025 revenue of $27.03 billion and adjusted EPS of $8.69.
For the second quarter, Jabil estimates revenue to be between $6.1 billion and $6.7 billion, with adjusted EPS projected between $1.60 and $2. Analysts are expecting an average of $6.27 billion in revenue and an EPS of $1.79. Jabil's regulated industries revenue is predicted to drop by 8% year-over-year in the second quarter, primarily due to persistent softness in the renewable energy sector, as indicated by Chief Financial Officer Greg Hebard during the call.
Meanwhile, intelligent infrastructure sales are expected to grow by 8%, while connected living and digital commerce revenue is projected to decline by 20% due to the mobility divestiture..