Apple (AAPL) Suppliers on Watch as First Profit Decline Since 2003 Expected in Q2
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Price: $169.02 +1.27%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.3%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.3%
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With Apple (Nasdaq: AAPL) seeing some slowdown in market growth for its mobile devices, who might be some of the casualties of war?
Recently, component-market Cirrus Logic (Nasdaq: CRUS) issued a Q1 warning, causing shares to plummet over 15 percent on Wednesday. The company cited an inventory glut, suggesting slower iPhone sales. It makes sound components for the iPad and iPhone.
The warning by Cirrus pressured peers as well; companies like Broadcom (Nasdaq: BRCM), Jabil Circuit (NYSE: JBL), and Flextronics (Nasdaq: FLXS) all ended up lower on the session. Broadcom derives 15 percent, Flextronics 8 percent, and Jabil 13 percent of revs from Apple. Up until recent, the close connection hasn't been considered a liability. Almost like the Zynga/Facebook link of 2011 - 12.
Apple even ended the session down 5.5 percent following the outlook.
Hon Hai Precision (Foxconn) also posted its largest revenue decline in 13 years during March. Foxconn is generally regarded as the primary iPhone maker, also dabbling in iPads as well.
Despite the warning from Cirrus, Apple CEO Tim Cook has cautioned that it would be hard to extrapolate that information into estimates of the overall performance for Apple given complexities inherent in the supply chain.
Looking to fiscal Q2 results for Apple, analysts are largely expecting an 18 percent drop in net income to $9.5 billion, the first decline since 2003, Bloomberg noted today.
With shares down over 42 percent since all-time highs above $700 hit last September, investors and traders might still be on the sidelines following Q2 numbers unless an extraordinary even occurs. Goldman Sachs said yesterday that it wouldn't be planning on a capital allocation announcement with Q2 results, but did speculate that an announcement might happen shortly thereafter.
A larger dividend or buyback might be good enough to lure some back in; Apple's current yield of 2.6 percent is in the middle of the pack when compared with tech peers. JPMorgan's Mark Moskowitz commented today that Apple taking on debt and doubling its buyback and/or producing a dividend yield of 4 percent could be a possibility.
Shares of Apple are indicated higher Thursday morning.
Recently, component-market Cirrus Logic (Nasdaq: CRUS) issued a Q1 warning, causing shares to plummet over 15 percent on Wednesday. The company cited an inventory glut, suggesting slower iPhone sales. It makes sound components for the iPad and iPhone.
The warning by Cirrus pressured peers as well; companies like Broadcom (Nasdaq: BRCM), Jabil Circuit (NYSE: JBL), and Flextronics (Nasdaq: FLXS) all ended up lower on the session. Broadcom derives 15 percent, Flextronics 8 percent, and Jabil 13 percent of revs from Apple. Up until recent, the close connection hasn't been considered a liability. Almost like the Zynga/Facebook link of 2011 - 12.
Apple even ended the session down 5.5 percent following the outlook.
Hon Hai Precision (Foxconn) also posted its largest revenue decline in 13 years during March. Foxconn is generally regarded as the primary iPhone maker, also dabbling in iPads as well.
Despite the warning from Cirrus, Apple CEO Tim Cook has cautioned that it would be hard to extrapolate that information into estimates of the overall performance for Apple given complexities inherent in the supply chain.
Looking to fiscal Q2 results for Apple, analysts are largely expecting an 18 percent drop in net income to $9.5 billion, the first decline since 2003, Bloomberg noted today.
With shares down over 42 percent since all-time highs above $700 hit last September, investors and traders might still be on the sidelines following Q2 numbers unless an extraordinary even occurs. Goldman Sachs said yesterday that it wouldn't be planning on a capital allocation announcement with Q2 results, but did speculate that an announcement might happen shortly thereafter.
A larger dividend or buyback might be good enough to lure some back in; Apple's current yield of 2.6 percent is in the middle of the pack when compared with tech peers. JPMorgan's Mark Moskowitz commented today that Apple taking on debt and doubling its buyback and/or producing a dividend yield of 4 percent could be a possibility.
Shares of Apple are indicated higher Thursday morning.
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