Suppliers Hit in Wake of Apple Earnings; Cirrus Logic Loses 10%
Apple (NASDAQ: AAPL) released its fiscal first-quarter earnings results after the closing bell on Wednesday. While the company's profit was above Wall Street consensus, revenues came in light. Apple also guided for second-quarter revenue which is below current analysts' consensus.
For the first-quarter, the company reported net income of $13.08 billion or $13.81 per share, compared to $13.06 billion or $13.87 per share, in the year ago quarter. This compared to analysts' consensus EPS estimates of $13.44.
Revenue was $54.51 billion versus $46.33 billion last year. This barely missed Street consensus revenue estimates of $54.73 billion.
Looking ahead to the second-quarter, Apple said that it sees revenue of between $41 billion and $43 billion. This is below current consensus revenue estimates of $45.63 billion.
In the wake of the disappointing results, Apple shares have plunged on Thursday. At last check, the stock was trading down almost 12 percent to $453.57.
The hiccup from Apple is having a direct effect on the stocks of some of the company's top suppliers. According to RBC Capital analyst Doug Freedman, “Apple is one of the largest purchaser of semiconductors, consuming 10% of world-wide semiconductor content.”
The hardest hit stock in the wake of the results from the company has been Cirrus Logic (NASDAQ: CRUS), which Freedman estimates derives 72 percent of its revenue from Apple. On Thursday, CRUS was trading down around 10 percent to $26.94 late in the day.
Larger suppliers, including power management chip manufacturers Skyworks Solutions (NASDAQ: SWKS) and Avago Technologies (NASDAQ: AVGO) fell in early trade but have recouped most of their losses. Skyworks was last down around two percent while Avago had shed roughly 1.50 percent.
Freedman estimated that large chip-maker Broadcom (NASDAQ: BRCM) generates around 13 percent to 15 percent of its sales from Apple. He put Qualcomm's (NASDAQ: QCOM) exposure at 10 percent to 16 percent. Those stocks had lost roughly two percent and one percent, respectively.
Small-cap name Peregrine Semiconductor (NASDAQ: PSMI) was one of the hardest hit names on Thursday. The company, which has a market cap of under $419 million, generates more than half of its revenue from the iPhone according to estimates by Charter Equity's Edward Snyder. The shares were down almost eight percent in the last hour of trade on Thursday.
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