We already knew that businesses are buying more chips than they used to, and that consumers have started buying the end-product gadgets again. So it only makes sense to see stronger business in between those steps, too.
"Based upon our current expectations, it appears as though the worst of the recession is behind us," he said in Jabil's fourth-quarter report. The company saw a small net profit again after three quarters of red ink, all thanks to cost-cutting, a stronger market share, and "a more benign end-market environment."
Year-over-year, this quarter was far from impressive. Sales dwindled from $3.3 billion in 2008 to $2.8 billion this time around. Earnings fell from $0.28 per share to $0.03 per share -- nearly a 90% shrinkage.
But the fourth quarter was still way better than the rest of Jabil's year. The company lost $1.2 billion in fiscal 2009 but finished up with a $5.5 million fourth-quarter profit. Fiscal discipline turned red ink into black despite a severe loss of sales, and if Jabil can keep that newfound discipline when revenue returns to normal levels … well, you know what they say: What doesn't kill you makes you stronger.
Wall Street has shown the patience of an angel with Jabil's troubles, as the stock has soared almost 40% over the last year, even as the S&P 500 lost about 10%. Other circuit board specialists have beaten the broader market, too, including 800-pound gorilla Flextronics
I still think that chip designers like Texas Instruments
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.