Whenever a supplier of Apple Inc. (NASDAQ:AAPL) reports its results and outlook, it always attracted investors’ attention. That is primarily because it could provide some catalyst as to what is to expect in the upcoming quarter from the iPhone maker. Therefore, it would not be a surprise thing if investors start comparing Jabil Circuits, Inc. (NYSE:JBL) results with what is to expect from the tech bellwether.
Though a supplier result like Jabil Circuits, Inc. (NYSE:JBL) could not present a clear picture for Apple shares, it does offer something to investors. For instance, when Jabil reported its first quarter results on December 15, its earnings topped estimates by five cents a share while revenue exceeded expectations by approximately $200 million. That sent the stock up by twelve percent in the following day though there was not much movement in Apple stock. However, the company delivered stronger than expected December quarter.
As far as the outlook, the company guided second quarter EPS 46 cents on revenue of $4.35 billion for the second quarter. Jabil is getting revenue from diversified manufacturing services (DMS) and electronics manufacturing services (EMS).
Last week, Jabil reported 48 cents a share and revenue of $4.4 billion for the second quarter, which is ahead of its guidance. For the third quarter, the company expects 29 cents a share on top line of $4.4 billion. One of the comments made by its CEO, Mark Mondello, assumes significance, i.e. all its business divisions delivered above plan.
According to Forbes, a significant portion of DMS revenues come from Apple. In the last two-year period, the average revenue of DMS accounted for over 25 percent from apple. Now, the company is expecting 9 percent year-over-year growth in DMS revenue while EMS revenue is predicted to fall one year.
This could be interpreted that demand from the tech bellwether continued to be strong suggesting that iPhone maker could deliver another quarter of beat results. Incidentally, Apple shares hit the fresh one-year high of $141 on March 16, a day after Jabil reported its second quarter results. Currently, analysts’ expect an EPS of $2.01 and revenue of $52.86 billion.
Therefore, watch out for both Jabil and Apple stocks.