Electronics manufacturing services provider Jabil Circuit has been on a good run of late. Shares are up around 35% in the last five months even though the company has been issuing disappointing guidance figures.

Investors probably see its restructuring and cost cutting moves as positives. But with Jabil scheduled to release its fourth-quarter earnings on Sept. 25, it would be prudent to check if the company has enough tailwinds to continue its momentum.

What to expect
Jabil is expected to post earnings of $0.54 per share on revenue of $4.53 billion. The expected revenue is 4.50% higher than last year's period, while earnings would be same as last year's period. Estimates have dropped considerably since Jabil's last earnings call and are now in line with the company's own outlook. Hence, Jabil shouldn't have much difficulty in at least meeting the estimates. 


What next?
Earnings will not be important since Jabil is expected to beat the already low estimates. However, investors will be looking for concrete evidence that the business is improving and cost-cutting is helping margins.

But, a look at its three business segments sends out mixed signals. For instance, Jabil's High Velocity business performed really well in the third quarter -- with revenue increasing 23% from the prior-year period and the segment contributing 29% to overall revenue. This business should have improved 15% from last year's fourth quarter if Jabil's guidance is taken into account. 

However, High Velocity was riding on BlackBerry's latest phones. Jabil was selected as a "go forward partner" for BlackBerry 10 in 2012. As the Canadian smartphone maker ramped up production and moved to launch the new devices, Jabil got a shot in the arm.

But, with BlackBerry's move at regaining its footing in the smartphone industry stuttering, a downbeat guidance from the High Velocity segment might be in the cards. Canaccord Genuity analyst Mike Walkley is of the opinion that sales of the BlackBerry 10 devices have been "very soft" and "weak." Even the QWERTY keyboard-toting Q10 hasn't clicked and it is rumored that T-Mobile has been removing BlackBerry 10 devices from its stores on account of poor sales. 

Moving on to the Diversified Manufacturing Services (DMS) business, the outlook over here might be upbeat. The segment accounts for 40% of overall revenue and has been boosted by the presence of Apple as a client. Jabil started manufacturing the casing for the iPhone 5 last year and probably in anticipation of further business from Apple, it acquired custom plastics manufacturer Nypro.

Now, Nypro specializes in the health care, packaging, and consumer electronics sectors and it might be possible that Apple tapped Jabil for the iPhone 5C, which is "unapologetically plastic." However, Apple hasn't released the pre-order numbers of the iPhone 5C, which it ideally does early Monday after the weekend when the device goes on pre-order. 

This might be construed as an ominous sign. Apple shares have retreated since the iPhone event took place last week and the lack of data from Cupertino might add to investors' worry further. For instance, the device was still available for pre-order on Apple's website as of this writing on Monday while last year, the iPhone 5 was sold out within an hour. 

The 5C and 5S did cross 100,000 reservations in China since they were launched last week, but that isn't a significantly huge number to move the needle. Considering these developments at Apple, the DMS segment's performance could be shaky going forward if the 5C fails to do as well as Cupertino's internal expectations, leading to subsequent order cuts.

The bottom line
Given the uncertainty over the two major business segments of Jabil, the company's outlook might turn out to be disappointing like the previous two quarters. As such, investors might consider booking some profits that they have enjoyed so far.

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The article A Few Reasons Why This Stock Might Disappoint Next Week originally appeared on Fool.com.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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