What: Shares of Jabil Circuit (JBL +2.93%) gained 15.6% in September, according to data from S&P Capital IQ. No fuss, no muss: Jabil's jump rested on a great fourth-quarter report.
So what: In the fourth quarter, analysts had been expecting earnings of roughly $0.45 per share on approximately $4.6 billion in top-line sales. Instead, the Tampa Bay-based supplier of electronics design and manufacturing services delivered adjusted earnings of $0.53 per share on sales of $4.7 billion, thus beating both of Wall Street's targets. Moreover, management set first-quarter guidance goals far ahead of Wall Street's then-current thinking.
Now what: The only customer in Jabil's Rolodex that represents more than 10% of the company's total sales and thus becomes a reportable data point is Apple. Cupertino's orders accounted for 24% of Jabil's revenues in fiscal year 2015, which means that its business has a very direct effect on Jabil's fortunes.
As such, you might want to take Jabil's strong results and even rosier guidance as a good sign for Apple. If nothing else, the company itself appears to have ordered up big volumes of Jabil's manufacturing and design services -- just in time for the all-important holiday season.
Granted, we don't know exactly how the iCompany's business folds into Jabil's portfolio. It's well-known that the iPhone and iPad designer makes use of several manufacturing services, and it's quite possible that a significant part of its Jabil orders right now have more to do with designing the next generation of its devices.
But it's still far more likely that Cupertino expected big order volumes for the iPhone 6s and iPad Pro updates, making its build orders to Jabil and others fit the bill. In other words, it's a good bet that Jabil's strong numbers indicate an equally impressive sales season for its biggest customer. So far, so good: The iPhone 6s sold 13 million units in its first week on the market.
