Apple -1% premarket following China Mobile, Jabil news

China Mobile's iPhone statement and contract manufacturer Jabil's (JBL - shares -20.6% premarket) weak February quarter guidance are pressuring Apple (AAPL) shares in premarket trading.

Jabil, which received 19% of its FY13 (ended Aug. '13) sales from Apple and has strong iPhone 5C exposure, is guiding for a 25% Y/Y sales drop in its diversified manufacturing services segment (DMS), which provides iPhone casings.

On its CC (transcript), Jabil stated it saw unexpected "demand changes" from a DMS customer, but insisted the impact will be temporary, and that it will "reallocate assets and resources to different revenue streams for the same customer over the next 2 to 3 quarters."

Citi (Neutral) believes Apple accounts for ~50% of DMS' revenue, and thinks Jabil's guidance is indicative of a major drop in iPhone production. The firm believes its forecast for 38M March quarter iPhone sales is at risk.

Jefferies (Buy) is less concerned, arguing the guidance is "due mainly to a mix shift from the 5C to the 5S." There have already been many reports of production being shifted to the higher-ASP 5S from the 5C.

Yesterday, iPhone/iPad chip supplier Dialog Semi pre-announced strong Q4 sales.

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Comments (10)
  • sunworshipper
    , contributor
    Comments (69) | Send Message
    Excellent. More cheap shares for me to buy.
    18 Dec 2013, 09:36 AM Reply Like
  • harilaos
    , contributor
    Comments (6) | Send Message
    I agree 100%.
    18 Dec 2013, 09:58 AM Reply Like
  • aardvark3
    , contributor
    Comments (592) | Send Message
    Today is a gift from above! BUY!
    18 Dec 2013, 09:55 AM Reply Like
  • Atkins
    , contributor
    Comments (1049) | Send Message
    Got a fill at an unbelievable price. Scared holders dumping...Don't blame them at all (hopefully they're throwing their money in the mo-mos to easily make up their loses), but I will scoop up more as I'm able.
    18 Dec 2013, 10:10 AM Reply Like
  • jjkiam
    , contributor
    Comments (393) | Send Message
    Amazing to me that Citi continues to employ Glenn Yeung as it's principal Apple analyst. His permabear predictions and esp his stock target price projections should be an embarrassment to Citi and a source of HUGE frustration with the bank from it's clients. He only seems to come out of the woodpile when he thinks it is a good time to announce more negative conclusions. If you look at the ratings of analyst accuracy that are sometimes published, he is ALWAYS at the bottom.
    18 Dec 2013, 09:57 AM Reply Like
  • hko2012
    , contributor
    Comments (745) | Send Message
    Today must be Glenn's lucky day since the "announced" deal turned out to be a hoax
    18 Dec 2013, 12:45 PM Reply Like
  • Azazello
    , contributor
    Comments (1778) | Send Message
    @hko2012 plainly exposed:
    3 Jan 2014, 06:08 AM Reply Like
  • chadm
    , contributor
    Comments (35) | Send Message
    This is the gift to the Chinese government.... They make this announcement...shares drop...they buy them up....then announce the real news.
    18 Dec 2013, 10:01 AM Reply Like
  • Warren Buffett007
    , contributor
    Comments (1001) | Send Message
    I write here few weeks ago sell for $560! And now I write here wait for the $520-530!!.
    18 Dec 2013, 11:38 AM Reply Like
  • aardvark3
    , contributor
    Comments (592) | Send Message
    May be a long wait.
    19 Dec 2013, 10:01 AM Reply Like
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