Jabil Circuit forecasts strong first quarter on iPhone sales

Reuters News
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Posted: Sep 24, 2014 4:28 PM

(Reuters) - Contract electronics maker Jabil Circuit Inc forecast current-quarter revenue and core earnings above market estimates after sales of Apple Inc's iPhone 6 and 6 plus exceeded expectations.

Jabil's shares rose 4.1 percent in extended trading.

Apple sold more than 10 million iPhones in the first weekend after its new models went on sale on Sept.19, far surpassing the 2 million recorded for iPhone 5 two years ago.

RBS Capital Markets analysts said they expect "the positive demand for the iPhone" to drive growth for Jabil.

"As Apple's iPhone 6 ramps continue over the next three months, we believe this will act as an incremental tailwind for Jabil's total revenue," analysts wrote in a pre-earnings note.

UBS estimates iPhone 6 and 6 plus production to ramp up to more than 90 million units in the second half of the year.

Jabil said it expected first-quarter revenue to rise 6 percent in its diversified manufacturing services business, which makes casings for iPhones.

The company forecast first-quarter core earnings of 41-53 cents per share on revenue of $4.2 billion-$4.4 billion.

Analysts on average expected the company to earn 40 cents per share on revenue of $4.11 billion, according to Thomson Reuters I/B/E/S.

Jabil reported a net loss attributable to the company of $26.2 million, or 13 cents per share, in the fourth quarter ended Aug. 31, compared with a profit of $127 million, or 61 cents per share, a year earlier.

The company reported core earnings of 5 cents per share.

Revenue fell to $4.06 billion from $4.51 billion a year earlier.

Analysts on average had expected the company to break even on a per-share basis on revenue of $3.83 billion, according to Thomson Reuters I/B/E/S.

Jabil's shares closed at $20.85 on the New York Stock Exchange on Wednesday.

(Reporting by Anya George Tharakan in Bangalore; Editing by Don Sebastian)