Apple Stock Hits a Three Month Low Amid Warnings from iPhone Suppliers
According to a new report by Reuters, at least three iPhone suppliers have issued warnings on results to Apple that suggest weakening iPhone sales, causing the company’s stock to hit a three month low today.
Blaming foreign exchange costs and weakness in emerging markets like India, where customers are ditching iPhones for cheaper Chinese alternatives, Apple has already warned its investors that holiday sales would miss Wall Street expectations.
“Many suppliers have lowered numbers because of their unnamed ‘largest customer,’ which is Apple”, said Elazar Capital analyst Chaim Siegel. “Apple got cautious in their guidance and it’s hitting their suppliers”, he continued.
According to FactSet, Apple sold 46.8 million iPhones in Q4 which missed analyst expectations of 47.5 million iPhones. JP Morgan analysts have also weighed in by cutting their price target for Apple by $4 to $270.
Lumentum Holdings Inc (LITE.O), the main supplier of the Face ID technology in the latest generation of iPhones, cut $70 million off its forecasts for revenue on Monday.
Screen maker Japan Display Inc (6740.T) cited lower smartphone demand in cutting its own outlook, while British chipmaker IQE Plc (IQE.L) said lower orders from a major customer would reduce its results for this year. Shares in Lumentum fell nearly 30 percent, dragging down shares of other suppliers and chipmakers.
Last week, it was reported that Apple had told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR.