Jabil Circuits (JBL) cites customer slowdown for reduced outlook

Jabil reporting an in line number with guidance well below the street for next quarter. The 34 cents analysts are expecting will be replaced with a paltry 18-22 cents non-gaap. Revenue guidance comes down to 3.05 - 3.15 billion for next quarter with the street at 3.25 billion. The full year will show some but not a lot of growth.

Jabil is a contract manufacturer. They're slaves to the ebbs and flows of their customers. This would be an ebb. I don't like these companies because they're just big rollups of manufacturing divisions -- they bought businesses companies were willing to sell because the companies couldn't make much money doing the manufacturing themselves. They're glorified sweat shops. Sure, they work great when there's a macro positive shift in demand. Most of the time, though, they run a bunch of disparate, unrelated businesses that they're subject to customer orders on and don't actually control gyrating inside their results.

Suppliers have seen weaker ordering patterns as the quarter has progressed. There's no reason to think Jabil would have seen anything differently as they're the assembler of those fine consumer electronics you're not buying because the economy is so scary.

FYI, Jabil's big customers are Cisco, Hewlett Packard, Nokia, and Philips. If they say there's weaker trends in handsets, it's probably Nokia. I'll listen to the call because I like it when analysts try to figure out which customer is weak even though Jabil won't tell them until they get offline.

Postscript 4:48pm

Display business particularly weak, down 40% this quarter and looking down another 20% next quarter -- that's Philips. I'd short a little at 38.14, its unch'd after the bell. They're also saying telecommunications is weak -- hello again, Ericsson.