This Apple Component Supplier Warned Of Sharply Lower Profits
Laird PLC, a UK-based global technology company that provides systems, components and solutions to protect electronic devices from electromagnetic interference and heat, saw its London-listed stock crash nearly 50 percent on Wednesday after issuing a profit warning.
Laird happens to be a component supplier to Apple Inc. (NASDAQ: AAPL)
Laird said in a press release that 2016 started off on a disappointing note, but a significant improvement was expected in the bottom half of the year. However, the company stated the acceleration of production for mobile device came much later compared to prior cycles and visibility on future volumes remains uncertain.
The company added that it also experienced increased margin pressure due to "unprecedented" pricing pressures and operational factors.
"We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well," Tony Quinlan, Laird's Chief Executive said. "We are confident that the actions we have taken will stabilise and improve the business.
Needless to say, investors are questioning what role Apple played in Laird's guidance.
According to a Reuters report, Laird said it expects to earn a pretax profit of around 50 million pounds ($61 million) which fell short of the 75.5 million pounds analysts were expecting.
Did Lair overestimate the level of business it was to conduct with Apple or did iPhone sales fall well short of what was expected?
The Street could have some answers when Apple reports its fiscal fourth quarter results next Tuesday.
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