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(Reuters) -Jabil reported a core quarterly profit slightly above Wall Street estimates on Thursday, as the electronic components maker turned its attention to cutting costs to cope with weak demand in a tough economy.
Shares of the St. Petersburg, Florida-based company rose 5.3% in early morning trading.
The company said in October that it plans to reduce its workforce on the basis of selling, general and administrative costs.
Jabil said Thursday that its second-quarter operating income is likely to take a hit of between $75 million and $100 million due to restructuring, severance and related charges.
On an adjusted basis, the company earned $2.60 per share in the quarter ended Nov. 30, compared with estimates of $2.58 per share, according to LSEG data.
“We experienced a broad-based weakening of demand during the final stretch of our first quarter,” said CEO Kenny Wilson.
“Despite weaker demand, the team delivered good year-over-year growth in core margins and core earnings per share,” he added.
First-quarter revenue of $8.4 billion was also largely in line with estimates of $8.35 billion.
The company's consumer, digital printing, retail and point-of-sale markets have faced oversupply as end demand remains weak. As a result, customers are delaying or cutting new orders, hurting Jabil, which counts Apple (NASDAQ as its largest customer. However, Jabil said in September that it expects growth in sectors such as clean energy infrastructure and ai data centers The global transition to electric vehicles is also expected to drive more than 20% growth in automotive and transportation segment revenue in fiscal 2024.
The company's revenue and core earnings forecasts for the second quarter were also largely in line with analyst expectations.
Jabil will join the group on December 18 after the markets open.
