Jabil Circuit to See Revenue Recovery Amid Strategic Restructuring and Market Challenges
Jabil Circuit (NYSE: JBL), an electronic components manufacturer and supplier for Apple (NASDAQ: AAPL), reported a -17% year-over-year decline in net revenue in its recent earnings announcement in late September. In 2024, Jabil faced demand issues across both electronics and diversified end markets. However, analysts believe the company is well-positioned to benefit from trends in industries such as data center power and cooling, as well as electric and hybrid vehicles in the mid-to-long term.
According to Visible Alpha consensus, Jabil’s net revenue is expected to continue declining in the first half of 2025, with a recovery anticipated in the second half. For fiscal year 2025, net revenues are projected to decline by -6.4% compared to 2024, reaching approximately $27 billion. The company’s electronics manufacturing services (EMS) are expected to see a recovery, with growth of +1.2% in 2025 following a significant decline of -18% year-over-year in 2024. In contrast, revenue from diversified manufacturing services (DMS) is expected to decline further by -9.5%, though this is an improvement over the -16% decline experienced in 2024. The DMS segment has faced particular challenges due to the recent divestiture of its mobility business, while ongoing softness in demand for 5G technology, renewable energy solutions, and digital printing has affected the EMS segment.
In response to the ongoing business challenges, Jabil has announced a strategic shift towards a new financial reporting structure with plans to focus on new key areas such as regulated markets, AI infrastructure, and connected living & digital commerce. Additionally, the $2.2 billion divestiture of its mobility business has allowed Jabil to initiate a $1 billion share buyback program, enhancing value for shareholders. Based on analyst forecasts, beyond the near-term hurdles, Jabil is projected to see year-over-year growth of +5.5% in 2026, with net revenues reaching $28.5 billion.
