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Key takeaways from the call include:
CEO Kenny Wilson expressed appreciation for the team at Jabil’s Mobility business and reaffirmed his commitment to serving customers, optimizing end markets and geographies, and preserving the company’s unique culture. CFO Fred McCoy discussed the growth in clean and smart energy infrastructure, the global transition to electric vehicles, and the accelerating growth of cloud solutions and healthcare, providing guidance for FY ’24.
Jabil executives provided updates on the company’s operations, including the production of artificial intelligence rack configurations for their largest cloud customers and the anticipated impacts on revenue growth due to changes in the Mobility business and a shift in the consignment model. They also provided full-year guidance for FY ’24, expecting revenue in the range of $33 billion to $34 billion, and plans for share repurchases, with an expanded authorization of $2.5 billion.
The company highlighted its growth in the automotive and cloud sectors, focusing on electrification and software-defined technology in the automotive sector and investments in new technologies like liquid cooling and photonics to meet customer needs in the cloud business. Jabil also discussed its plans for share buybacks and potential acquisitions, stating that buybacks are the priority due to the company’s undervaluation.
Jabil expects to complete about $1.5 billion to $1.7 billion of their $2.5 billion buyback program by the end of FY ’24, with the remaining balance to be completed in FY ’25. The company also discussed its inventory reduction efforts, expecting inventory days to be maintained in the range of 55 to 60 days, and expressed confidence in closing the Mobility transaction within two quarters.
During the call, Jabil executives also discussed the impact of consignment in the cloud and a shift towards higher-margin end markets, share gains in targeted areas such as automotive, healthcare, and renewables, and opportunities in China, regionalization, and reshoring trends in Europe and North America. The company also acknowledged uncertainty in the Semi-Cap business in fiscal year 2024 but anticipated a rebound in the second half of the calendar year.
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