Apple Stock Plunges to $400 After Supplier Warns of Weak Sales
April 17, 2013 2:23 PM
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Stock briefly dips below $400 USD, analyst predicts earnings miss
After quarters of confounding Wall Street "expert" analysts with better-than-expected earnings, could Apple, Inc. (
) be on the verge of a highly uncharacteristic miss of its own earnings target? That's what Citigroup Inc. (
) analyst Glen Yeung predicted in his
, citing supplier information as pointing to weaker-than-expected iPhone and iPad sales.
That prediction has been boosted by Cirrus Logic Inc. (
), which provides audio chips for the iPhone and iPad. Cirrus
investors Wednesday in its fiscal fourth quarter earnings results that its margins had weakened and that it was taking a large charge on unsold inventory of audio chips.
Cirrus's chip stock fluctuates primarily with the sales of its largest customer Apple's devices. Thus the large stock of unsold chips indicates weak sales of Apple's flagship devices.
Vernon Essi Jr., an analyst at Needham & Comp. told
The Wall Street Journal
, "[The warning] indicates that the recent fears of Apple's lackluster iPhone demand...are warranted."
Since the passing of iconic leader and late CEO Steven P. Jobs, Apple has continued to grow steadily under the quiet leadership of new CEO Tim Cook, but some fear the company is losing its marketing luster. Apple's faces tough competition from Android rivals --
Electronics Comp., Ltd. (
) and Google Inc. (GOOG) -- who have been more aggressive in updating their products' hardware and software.
Apple CEO Tim Cook has voiced concern about his company's plunging share prices.
[Image Source: Bloomberg]
Apple, which last year bumped the screen size of its iPhone to 4-inches, has largely been coasting on a "if-it-isn't-broken-don't-fix-it" approach to its operating system. While sales were strong last quarter, investors
hammered the company's stock
, concerned about
For a while it looked like $420 was a solid floor that the stock would resist breaking through. But amid the supplier warning Apple's stock plunged briefly below $400 USD. It is currently trading around $403 USD. Apple has lost over a quarter trillion dollars in market capitalization over the last half year, since hitting a record $700 USD per share last September.
Overall, the tech sector was down on Wednesday, but Apple's stock sunk more than most, dipping over 5 percent on the bad news. Rival Google Inc.'s (
) stock is trading around $780 USD, down ~1.5 percent. Google's market capitalization is currently around two-thirds that of Apple, as its stock hovers around record highs of $800 USD per share.
Cirrus Logic [press release]
This article is over a month old, voting and posting comments is disabled
4/17/2013 3:21:34 PM
Yeah I'm fed up with Android crap too, Jelly Bean on my Galaxy Note sucks balls, slow and laggy like hell, I'm buying Samsung ATIV S tonight in the local cell store and going WP8, after they added SD card, revamped outlook.com and been buusy adding cool games to the WP8 Marketplace like Modern Combat 4, I think I'm likely to stay with WinPhone camp for quite a while, given that now they covered all the omissions and deficiencies of WP7. I suggest you do the same, try WP8 hardware, preferably Samsung ATIV S since it has best hardware among all WP8 handsets. If you are not into heavy gaming and do not miss a lot of 3D games on Android (Shadowgun, Dead Trigger, etc) then WP8 maybe the best fit for you.
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