Jabil Inc (NYSE:JBL) revised its Q2 FY24 guidance post-completion of the divestiture of its Mobility business.

The company sold the business to BYD Co Ltd's (OTC:BYDDF) BYD Electronic (International) Company Limited for $2.2 billion.

CEO Kenny Wilson said, "We are pleased to successfully close this transformational deal and I am confident that this is the right step forward for Jabil. The net proceeds will enable us to enhance our shareholder-centric capital framework, including incremental share buybacks. Additionally, it will provide opportunities for further investment in key areas of our business."

As stated, for modeling purposes, the Q2 guidance provided on December 14, 2023, assumed a January 31, 2024, close date for the mobility divestiture. With the transaction closing earlier, Jabil now anticipates the midpoint of the prior guidance range for net revenue and core EPS for Q2 to be lower by approximately $400 million and $0.30, respectively, which aligns with the expectations the company outlined in its Q1 earnings call.

Q2 FY24 Outlook: Jabil lowered guidance for revenue to $6.6 billion - $7.2 billion (consensus: $7.34 billion) from $7.0 billion-$7.6 billion and adjusted EPS to $1.43 - $1.83 (consensus: $1.93) from $1.73 - $2.13.

FY24 guidance: The company also slightly revised revenue guidance to $30.6 billion (vs. consensus: $31.28 billion) from $31 billion and continues to expect core EPS of $9.00+ (vs. estimate of $9.13).

Mike Dastoor, CFO, said, "The earlier close and receipt of funds will enable us to begin initiating plans to reduce stranded costs and executing a series of accelerated buybacks throughout FY24. As a result, we expect to fully utilize our current $2.5 billion dollar repurchase authorization this fiscal year. These actions give me confidence that we will be able to offset lower income in Q2 and deliver core earnings for FY24 in excess of $9 per diluted share."

Price Action: JBL shares are trading lower by 0.381% at $127.50 premarket on the last check Friday.

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