Apple (AAPL) shares slide after TF Securities analyst cuts estimates on supply worries

November 29, 2022 11:48 AM EST
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Apple (NASDAQ: AAPL) shares dropped Tuesday after TF International Securities analyst Ming-Chi Kuo cut his 4Q22 iPhone shipments and said there are significant downside risks to the Apple and iPhone supply chain due to the Zhengzhou iPhone plant labor protests.

Kuo stated that the total iPhone 14 Pro and 14 Pro Max shipments in 4Q22 will be 15 to 20 million units lower than expected. He also sees fourth-quarter iPhone shipments down around 20%, between 70 to 75 million units, compared to the market consensus of 80 to 85 million units.

In addition, Kuo said that while "Pegatron and Luxshare ICT have obtained about 10% of the iPhone 14 Pro and 14 Pro Max orders from Foxconn, respectively," mass shipments will not be until late December at the earliest and iPhone 14 Pro series shipments in December were still "significantly lower than expected."

Kuo went on to state that the high price of the iPhone 14 Pro series will result in Apple's iPhone revenue in the fourth quarter potentially being significantly lower than consensus by 20% to 30% or more, while iPhone 14 Pro series shipments in Q4 were "significantly lower than expected, but component suppliers were generally not informed by Apple to cut orders, resulting in 4Q22 component inventory higher than normal for several weeks, which will lead to component shipments may have a more significant QoQ/HoH decline in 1Q23/1H23."

Apple shares are currently down 1.6%.

By Sam Boughedda

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