Jabil lifts guidance as AI demand accelerates
The electronics manufacturer raised its full-year earnings outlook to $12.70 a share after core profit rose 20%.
The electronics manufacturing services provider Jabil (JBL) posted third-quarter results that sent its full-year guidance higher as artificial-intelligence demand gathered pace. Revenue climbed 6% from a year earlier to $8.8 billion, the fastest annual growth in six quarters.
The quarter marked a clear inflection: sequential sales jumped 6%, reversing two quarters of near-flat performance, while core operating income rose 20% to $504 million. Management said the acceleration was broad-based, with particular strength in AI-related programs and a rebound in automotive and connected-living segments that had lagged earlier in the year.
Core earnings reached $3.16 a share, up 24% from the prior-year period and ahead of the $2.95 analysts had expected. Operating margin expanded to 5.7%, extending a three-quarter streak of improvement, even as gross margin slipped to 9.5% on higher material and logistics costs.
Two segments drove the upside. Intelligent Infrastructure, which houses AI server and networking programs, saw demand accelerate for the second consecutive quarter. Regulated Industries—including automotive, renewables, and healthcare—reversed earlier declines, posting sequential growth that management called "better than expected".
With the quarter in hand, Jabil raised its full-year targets. Revenue is now seen at $35 billion, up from $34 billion, while core earnings are projected at $12.70 a share, a $0.45 increase from the prior guide. Free cash flow is expected to exceed $1.4 billion, and fourth-quarter revenue is forecast between $9.2 billion and $10.0 billion, a wider and higher range than the $8.1 billion–$8.9 billion given three months ago. The company also said it now expects AI-related revenue to be "meaningfully higher" than previously disclosed, though it did not quantify the revision.
Working-capital trends drew attention. Accounts receivable jumped 36% from a year earlier to $5.5 billion, outpacing revenue growth, while inventories rose 27% to $5.9 billion. Management said the build reflected customer pull-ahead requests and new program ramps, particularly in AI and automotive. Despite the inventory increase, adjusted free cash flow improved to $991 million for the first nine months, up 22% from the prior-year period.
Capital returns accelerated. Jabil repurchased $891 million of stock in the first nine months, up from $600 million at the six-month mark, and declared a quarterly dividend of $0.10 a share. Restructuring charges fell to $14 million, the lowest in at least five quarters, as the company wrapped up cost actions begun in fiscal 2025.