Fri, Apr 19, 2013 - Page 15 News List

Apple shares dive as supplier slashes own profit forecast

SOUR APPLES:The fall was prompted by Cirrus Logic’s downgrading of its revenue estimates and dethroned Apple from its seat as the biggest US firm

AFP, NEW YORK

Apple Inc shares plummeted more than 5 percent on Wednesday after Cirrus Logic, a supplier of Apple components, slashed its own profit guidance, suggesting that its Apple business had weakened.

Apple shares closed down US$23.44, or 5.5 percent, at US$402.80, after briefly dipping below US$400 earlier in the session.

The decline robbed Apple of its crown as biggest US company by market capitalization. Apple is now worth US$378.25 billion, compared with oil giant ExxonMobil’s US$385.68 billion.

Shares in Apple are well below the 52-week peak above US$700 they reached in September last year, as the California tech giant faces tougher competition from South Korea’s Samsung Electronics Co and others in the busy smartphone and tablet technology market.

The sell-off came after Cirrus, which relies on Apple for the majority of its sales, warned that its profits for its fiscal fourth quarter ended on March 30 would be lower.

Cirrus reduced its revenue forecast and trimmed its gross margin forecast after disclosing that it expects a US$23.3 million inventory reserve, of which US$20.7 billion is “due to a decreased forecast for a high-volume product as the customer migrates to one of Cirrus Logic’s newer components.”

Analysts at investment bank Jefferies said they believe Cirrus is the main provider of audio integrated circuit chips for Apple’s iPhones and iPads.

The Jefferies note also cited a trade publication article that suggested Apple’s new iPad mini launch would not take place until the third quarter.

The Cirrus profit warning “seems to be related to weaker shipments to Apple for iPhone 5,” Barclays PLC said in a research note.

Bernstein Research also lowered its quarterly earnings forecast for Apple, trimming its revenue estimate by US$1.3 billion to US$41.1 billion, and reducing profit estimates by US$0.50 to US$10.02 per share.

In Taiwan, among the so-called “Apple concept stocks,” Hon Hai Precision Industry Co (鴻海) fell 1.29 percent to close at NT$76.70, while smartphone camera lens supplier Largan Precision Co (大立光) dropped 3.22 percent to finish at NT$722.

Hon Hai encountered intense foreign institutional selling since Apple accounts for between 40 and 50 percent of its total sales.

Additional reporting by CNA

This story has been viewed 2066 times.
TOP top