Contract manufacturer Jabil on Tuesday easily beat Wall Street's targets for its fiscal fourth quarter and guided higher for the current period. JBL stock surged on the news.
The St. Petersburg, Fla.-based company earned an adjusted $2.34 a share on sales of $9.03 billion in the quarter ended Aug. 31. Analysts polled by FactSet expected Jabil earnings of $2.15 a share on sales of $8.39 billion. On a year-over-year basis, Jabil earnings rose 63% while sales climbed 22%.
For the current quarter, Jabil predicted adjusted earnings of $2.20 a share on sales of $9.3 billion. That's based on the midpoint of its guidance. Wall Street had forecast Jabil earnings of $2.11 a share on sales of $8.93 billion in the fiscal first quarter. In the year-earlier period, it earned $1.92 a share on sales of $8.57 billion.
Jabil also announced a plan to buy back up to $1 billion of its stock.
"This new authorization reflects our belief in Jabil's ability to generate strong earnings and free cash flows," Chief Financial Officer Mike Dastoor said in a news release.
Jabil Stock Nears Buy Point
On the stock market today, JBL stock jumped 2.2% to close at 57.42. Earlier in the session, it was up as much as 4.6%.
JBL stock has formed a cup-with-handle base with a buy point of 65.98, according to IBD MarketSmith charts.
Jabil has two business segments: electronics manufacturing services and diversified manufacturing services. The electronics manufacturing unit makes gear for 5G wireless, cloud computing, networking, data storage, industrial and other applications. The diversified manufacturing unit makes automotive, health care, mobile and other devices.
Electronics manufacturing accounted for 51% of the company's sales in its fourth quarter, with diversified manufacturing contributing 49%.
Jabil's electronics manufacturing sales rose 32% year over year while diversified manufacturing sales increased 13%.
JBL Stock Is On IBD's Tech Leaders List
JBL stock is tied for first place out of 15 stocks in IBD's electronics contract manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 98 out of 99. The Composite Rating scores a stock's key growth metrics against all other stocks regardless of industry group.
The electronics contract manufacturing industry group ranks No. 33 out of 197 industry groups that IBD tracks.
Also, JBL stock is on IBD's Tech Leaders stock list.
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