Jabil's (JBL) Q2 report is the first since the divestiture of its mobility business. The company sold this unit, responsible for manufacturing consumer electronics components, to BYD Electronic of China for $2.2 billion in cash in December. JBL will pivot towards faster-growing markets, such as AI cloud data centers, electric vehicles, healthcare, and renewable energy. The market reacted negatively to Jabil's earnings report, with the company's stock falling 11.3% to $130.83 in premarket trading.

In its recent earnings report for Q2 (Feb), Jabil Inc. (JBL) announced earnings per share (EPS) of $1.68, which was $0.02 better than the consensus estimate of $1.66. However, the company's revenues fell by 16.8% year-over-year to $6.77 billion, missing the consensus of $6.89 billion.

Moving forward, Jabil has issued downside guidance for Q3 (May), expecting EPS of $1.65-2.05, which is lower than the consensus of $2.12. The company also expects Q3 revenues to be in the range of $6.20-6.80 billion, falling short of the consensus of $7.37 billion.

For the full fiscal year 2024 (FY24), Jabil has issued downside guidance, expecting EPS of $8.40, which is lower than expectations of $8.99 and below the company's prior guidance of $9.00. The company also expects FY24 revenues of $28.50 billion, below analyst forecasts of $30.89 billion and the company's prior guidance of $31.00 billion.

CEO Kenny Wilson expressed satisfaction with the company's performance amidst revenue challenges, stating, Despite revenue headwinds this year, which are expected to be short-term, I'm pleased with the resiliency of our model and our team's demonstrated ability to execute. Wilson further emphasized Jabil's focus on improving core operating margins and delivering strong free cash flow in FY24. Regarding FY24 as a transitional year for Jabil, Wilson highlighted the successful completion of the mobility sale, the largest transaction in the company's history. He commends Jabil's efforts to optimize its footprint and cost structure, aiming to become a more streamlined company. Wilson expressed confidence in expanding margins year-on-year while delivering a core EPS of $10.65 for FY25, supported by key opportunities across diversified end-market segments.

Jabil's FY24 is considered a transitional year, marked by the successful completion of the company's largest transaction in history, the sale of its mobility business. This divestment has allowed the company to focus on faster-growing markets such as AI cloud data centers, electric vehicles, healthcare, and renewable energy.