Jabil Inc. Reports 16.6% Revenue Decline and Strategic Restructuring Plans

Jabil Inc. reported a decline in financial performance for the three months ended November 30, 2024, with net revenue of $6.994 billion, a decrease of 16.6% from $8.387 billion in the same period last year. The company's gross profit also fell to $606 million, down from $775 million, resulting in a gross margin of 8.7%, compared to 9.2% in the prior year. Operating income decreased to $197 million from $303 million, while net income attributable to Jabil Inc. was $100 million, down from $194 million. Earnings per share (EPS) also declined, with basic EPS at $0.89 compared to $1.49 a year earlier.

The decrease in revenue was attributed to significant changes in the company's business segments. The Connected Living and Digital Commerce segment saw a 46% drop in revenue, primarily due to the divestiture of the Mobility Business, which accounted for a 50% decrease in revenues. The Regulated Industries segment experienced a 7% decline, driven by reduced revenues in the renewable energy infrastructure and automotive sectors. Conversely, the Intelligent Infrastructure segment reported a 5% increase in revenue, bolstered by growth in cloud and data center infrastructure.

In terms of strategic developments, Jabil completed the acquisition of Mikros Technologies LLC for $63 million on October 1, 2024, enhancing its capabilities in liquid cooling solutions. Additionally, the company has undergone a restructuring plan aimed at optimizing its organizational effectiveness, which is expected to incur pre-tax costs of approximately $150 million to $200 million over the fiscal year. The restructuring plan includes headcount reductions and realignment of manufacturing capacities.

Operationally, Jabil's total assets increased to $17.771 billion as of November 30, 2024, from $17.351 billion at the end of the previous fiscal year. The company reported a total employee headcount of 250,000, reflecting ongoing adjustments in its workforce. The company also noted a significant reliance on a limited number of customers, with its five largest customers accounting for approximately 33% of net revenue. Jabil's international operations contributed 80.8% of net revenue, indicating a strong global presence.

Looking ahead, Jabil anticipates continued challenges in the market, particularly in light of the recent restructuring and divestitures. The company is focused on managing costs and capital resources effectively to navigate the evolving economic landscape. Jabil's management remains committed to enhancing operational efficiency and leveraging its global manufacturing capabilities to meet customer demands while maintaining a strong liquidity position.