Taking a look at the headline numbers, JBL posted EPS of $0.90, beating the consensus number by $0.02. JBL has now strung together eleven straight EPS beats, although the magnitude of the beats has been modest, averaging about $0.03/share over this span. On a growth basis, core EPS grew by 13% this quarter, driven by healthy top-line growth, solid cost containment, and steady share repurchases. During the quarter, the company returned over $200 mln in capital to shareholders via share buybacks and dividends.
On the topic of the top line, revenue increased 16.4% to $6.5 bln, easily out-performing the $6.1 bln expectation. As noted above, JBL saw solid performance from both of its segments -- Diversified Manufacturing Services (DMS) and Electronics Manufacturing Services (EMS). In the former (46% of revenue), revenue grew by 10%, despite a weaker than anticipated mobility market. Offsetting that weakness was strength in healthcare, edge devices and accessories, and lifestyle products. In the latter business (54% of revenue), revenue jumped by 22%, driven by its performance in print and retail, industrial and energy, 5G, and cloud.
During the earnings call last night, management was quite bullish, commenting that the EMS segment results were driven largely by new business awards coming in better and faster than it had anticipated. Overall, management sees this strong performance as proof that its diversification strategy is working, and that its investments in healthcare, automotive, 3D, cloud, and 5G wireless are paying dividends. Furthermore, the company stated that its long-term extension and partnership with Johnson & Johnson (JNJ) is on track, delivering as expected, offering another catalyst for the company.
JBL is expecting the momentum to continue into next quarter, as evidenced by its guidance. Specifically, it guided for EPS of $0.51-$0.71 versus the $0.61 consensus, on revenue of $5.8-$6.4 bln versus the $5.84 bln consensus. Looking out longer term, the company remains confident that it will generate annual revenues approaching $1.0 bln, with accretion to both margins and cash flows, in 2020. Bolstering its margins, earnings, and cash flow is its asset-light business model and solid cost containment. In 1Q19, its SG&A expenses actually fell by about 5% to $278.1 mln, boosting operating margin to 3.3% from 2.6% in the year ago period.
Overall, while not a high-flyer with upper double-digit growth rates, JBL continues to execute well, while offering a mix of growth and income through its dividend (currently yielding 1.5%).