Why Jabil Stock Dropped 12% Today

Core Insights - Jabil's stock fell 12.5% following mixed earnings and weak guidance for fiscal Q2 2024 [1] - Analysts had expected earnings of $1.66 per share on $6.9 billion in sales, but Jabil reported a core profit of $1.68 per share and sales of $6.8 billion [1][2] Financial Performance - Jabil's total earnings for the quarter were reported at $1.1 billion, or $7.31 per share, primarily driven by its mobility division, which contributed $944 million to profits [2] - After excluding the mobility division's profits, the core profit was calculated at $1.68 per share [2] Future Guidance - Management provided guidance for fiscal Q3 revenue between $6.2 billion and $6.8 billion, with adjusted profits per share expected to range from $1.65 to $2.05 [2] - GAAP profits are projected to be between $0.82 and $1.38 per share [2] Annual Forecast - For the full year, Jabil anticipates $28.5 billion in revenue and $8.40 per share in core profits, suggesting a valuation based on core earnings rather than GAAP [3] - With a market capitalization of $18.8 billion and a share price of $128, the current valuation implies a price-to-earnings ratio of 15.2 times, which is considered expensive given a projected 12% annual growth in core earnings over the next five years [3]