- 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.
Jabil Circuit Inc. (JBL): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
at Zacks.com (Nov 6, 2014)