Jabil (JBL) Up 6.7% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Jabil reported strong third-quarter fiscal 2025 results, surpassing both revenue and earnings estimates, driven by solid demand in key markets such as data center infrastructure and digital commerce [2][3][4]. Financial Performance - Net income on a GAAP basis was $222 million or $2.03 per share, up from $129 million or $1.06 in the prior-year quarter, primarily due to top line growth [3]. - Non-GAAP net income was $279 million or $2.55 per share, compared to $230 million or $1.89 in the prior-year quarter, exceeding the Zacks Consensus Estimate of $2.33 [3]. - Revenues increased to $7.82 billion from $6.76 billion year over year, beating the consensus estimate of $7.08 billion [4]. Segment Performance - The Regulated Industries segment generated $3.1 billion in revenues, flat year over year, contributing 39% to total revenues, affected by weakness in renewable energy and EV verticals [5]. - The Intelligent Infrastructure segment reported $3.4 billion in revenues, up 51% year over year, contributing 44% to total revenues, supported by demand in capital equipment and AI-related cloud services [6]. - The Connected Living & Digital Commerce segment saw revenues decline to $1.3 billion, down 7% year over year, accounting for 17% of total revenues, impacted by soft demand for consumer products [7]. Profitability and Cash Flow - Gross profit was $681 million, compared to $608 million in the year-ago quarter, while non-GAAP operating income rose to $420 million from $350 million [8]. - Non-GAAP operating margin was 5.4%, down from 6% in the prior year [8]. - Jabil generated $406 million of net cash from operating activities, with $1.52 billion in cash and cash equivalents as of May 31, 2025 [9]. Future Guidance - For the fourth quarter of fiscal 2025, revenues are expected to range from $7.1 billion to $7.8 billion, with non-GAAP operating income projected between $428 million and $488 million [10]. - Management raised fiscal 2025 revenue projections to $29 billion from $27.9 billion, with non-GAAP earnings per share expected at $9.33, up from $8.95 [11]. Market Sentiment - There has been an upward trend in estimates revision over the past month, indicating positive market sentiment [12]. - Jabil holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [14].