Saturday , August 20 2022

Apple Shares Sink After the iPhone deliverers look lower



AAPL -5.04%

stocks fell on Monday, as worried investors have deepened the sale of new iPhones as two key device vendors cut their projections of earnings for the coming months.

Japan Displai

which delivers screens for iPhone KSR, has reduced its earnings estimates for its fiscal year ending in March. It is said that the orders for the latest LCD panels will be significantly lower than the initial expectations for the three months ending in March.

Similar to that,

Lumentum Holdings

LITE -32.98%

which makes components for face recognition for the iPhone, has reduced its earnings forecast by almost 25% in the three months that ended in December, saying one of the largest consumers has substantially reduced shipments for pre-set tasks.

Although none of the suppliers mentioned Apple by name, Vall Street responded to iPhones' actions that cut more than 5%, as the technology paradise has led to major stock market losses. Sales continued the decline that began after Apple released revenue estimates for the current quarter that disappointed investors and said it would no longer report the sale of the unit for iPhones, iPads or Macs. Apple declined nearly 13% from the closing of trading on November 1, before it announced earnings.

Apple did not have any comments, but referred to its previous remarks that its supply chain is complex and that an attempt to extrapolate the performance of any of its products on the basis of a supplier's forecast may create a separation between projected sales and actual sales.

The iPhone maker has moved from business that has driven a number of devices delivered to one that relies on products of stories and more sales of software and services to save revenue.

Investors are adapting to the transition, which contributes to the decline in stocks, said Arif Karim, senior investment analyst at Ensemble Capital Management. The firm, Burlingame, California, which has $ 800 million under management, believes Apple among the top 25 holding companies.

"What we are now going through is a series of doubts about the balance between unit growth – the number of iPhones sold – and value to customers, from higher prices to add-ons such as AirPods to services," Karim said.

JPMorgan Chase

& Co. on Monday cut its Apple earnings estimates by 2 cents per share and predicted a drop in iPhone sales during the year and a drop in iPhone sales in emerging markets due to economic challenges. However, JPMorgan said he continues to expect the sale of Apple's seller and music streaming business to deliver strong growth.

Apple's shares have long been linked to the forecasts of key suppliers of the company. In 2013, when the number of iPhones sold slowed, stocks fell 5.5% after iPhone suppliers

Cirrus Logic

he warned of a large write-off of inventories due to lower demand by an unnamed customer, which is believed to be Apple. Similar stock drops occurred in 2016 after Vall Street Journal reported that Apple cut its orders from iPhone suppliers. Apple later reported the first drop in sales of iPhone devices for the 2016 fiscal year.

However, Ben Bajarin, a technology analyst at Creative Strategies, said it was difficult to read too much about downsizing forecasts from Apple's suppliers such as Japan Displai and Lumum because Apple could reduce or increase orders at any time at the request of the iPhone. "The question is: What will it look like for the whole calendar year? It's hard to predict that this is far," he said.

Apple released three new iPhones this year: iPhone KSS $ 999, $ 1,099 iPhone KSS Mak and $ 749 iPhone KSR. Analysts expected the lower price of the KSR, which was sold on October 26th, to represent about half the total sales of the iPhone.

When asked during a conversation with analysts on November 1 on how the device works, the executive team Tim Cook said Apple had "very, very little data" on it. However, he said the more expensive models of KSS and KSS Mak that were launched a month earlier were "on a great start".

To write Tripp Mickle at [email protected]

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