Jabil Inc (NYSE: JBL) stock rose over 8% on 19th June (as of 1:19 pm GMT-4; Source: Google finance) after the company posted better than expected results for the third quarter of FY 19.
JBL in the third quarter of FY 19 has reported the adjusted earnings per share of 57 cents, beating the analysts’ estimates for the adjusted earnings per share of 56 cents, according to the analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue growth of 13 percent to $6.14 million in the third quarter of FY 19, beating the analysts’ estimates for revenue of $6.01 million. Revenue for the DMS segment was $2.1 billion down 6% year-over-year. This was mainly due to continued weakness in mobility demand offset by strength in the healthcare and packaging businesses. Revenue for the EMS segment increased by 26% year-over-year to $4 billion. JBL continue to see exceptional growth in EMS associated with the new business wins in 5G wireless, cloud, and automotive.
Core operating income came in $11 million, which is better than the midpoint of the company’s guidance during the quarter at $185.8 million, an increase of 24% year-over-year, representing a core operating margin of 3%. Net interest expense during the quarter was approximately $58 million above previous expectations driven mainly by the timing and scale of the ongoing new business awards.
For the fourth quarter 2019, the company expects the net revenue to be in the range of $6.3 billion and $6.9 billion. Analysts surveyed by Zacks had expected revenue of $6.35 billion. Adjusted earnings is projected to be in the range of $0.76 to $0.96 per diluted share. For the fourth quarter 2019, DMS segment revenue is expected to increase 4% on a year-over-year basis to $2.5 billion, while the EMS segment revenue is expected to increase 22% on a year-over-year basis to $4.1 billion. Core operating income is estimated to be in the range of $215 million to $275 million with core operating margin in the range of 3.4% to 4%.
For 2019, for DMS, the company now expects slightly higher growth within edge devices and accessories. The expectations for mobility and healthcare and packaging remain consistent with the outlook in March. Given the updated outlook, the company now expect core operating margin for DMS to come in at 3.9%, which is a 20 basis point improvement from a quarter ago on slightly lower revenue of $9.9 billion.