Apple suppliers face china iPhone sales exposure challenges

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Published: January 9, 2019 10:15:22 PM

That estimate is down $50 million, or less than one percent, from a prediction of $319.9 million four weeks earlier as four analysts have each cut their revenue estimate by $60 million.

That estimate is down million, or less than one percent, from a prediction of 9.9 million four weeks earlier as four analysts have each cut their revenue estimate by million.

On Jan. 2, Apple Inc. cut its revenue outlook for the first time in almost two decades, citing weaker iPhone demand in China. Asian suppliers slumped and analysts slashed their price targets. In the fiscal year ended Sept. 2018, Apple generated 63 percent of its total revenue from the sale of iPhones and 20 percent of its total revenue in Greater China.

Bloomberg did a supply-chain analysis to estimate what revenue impact the Apple announcement may have had on seven iPhone component suppliers.

Applying the 20 percent that Apple gets from sales to Greater China, Bloomberg Supply Chain analysts estimated how much of the suppliers revenue might be at risk due to lower iPhone sales in that country. Bloomberg utilized estimates on the dollar content per iPhone, by supplier, and applied this to total iPhone unit volumes in the 12-months ended Sept. 30.

At the high end is Cirrus Logic, with an estimated 77 percent of total revenue generated from Apple’s iPhone including 15.5 percent from iPhone sales in China alone. At the lower end is Broadcom Inc., where 9.4 percent of revenue is generated from iPhones and 1.9 percent from iPhones in China.

Key Insights
Since Apple’s announcement, analysts have slashed revenue estimates for the suppliers and the stocks have slumped. Below is a breakdown for each of the seven identified suppliers with current revenue growth estimate, how much it has changed in the past four weeks, stock performance since the Jan. 2 market close and an estimate on when each company will report results:

Cirrus Logic Analysts estimate Cirrus Logic’s revenue slumped 34 percent in the three months ended December to $319.4 million. That estimate is down $50 million, or less than one percent, from a prediction of $319.9 million four weeks earlier as four analysts have each cut their revenue estimate by $60 million.

Cirrus gets an estimated 15.5 percent of revenue from iPhone-related sales in China The stock has slumped 5.2 percent between Apple’s announcement and Jan. 8 Cirrus is expected to report results Jan. 31
Dialog SemiconductorAnalysts estimate Dialog Semiconductor revenue fell 2 percent in the quarter ended December, to EU 386.94 million. That’s down slightly from EU 387.37 million estimated four weeks earlier.

Dialog gets an estimated 11.8 percent of its revenue from iPhone sales in China The stock was little changed percent between Apple’s announcement and Jan. 8 The company is expected to report results Feb. 27
Japan Display Inc. Analysts estimate Japan Display revenue jumped 53 percent in the quarter ended Dec. to JPY 293.53 million. The estimate is down JPY 3.08 million over the past four weeks Japan Display gets an estimated 8.2 percent of revenue from iPhone sales in China The stock is down 1.4 percent since Dec. 28, the last close prior to Apple’s announcement on Jan. 2 Japan Display is expected to report results Feb. 14

Skyworks SolutionsAnalysts estimate Skyworks Solutions had revenue of $1.01 billion in the period ended January, down 4 percent from a year earlier. That’s a decrease of $1.05 million in the past month.

The company gets an estimated 7.9 percent of revenue from iPhone sales in China The stock fell 4.1 percent between Jan. 2 and Jan. 8 Post close on Jan. 8, Skyworks said fiscal first-quarter revenue will be about $970 million, down from prior guidance of between $1 billion and $1.02 billion, citing “unit weakness across out largest smartphone customers.” The company is expected to report results Feb. 4

QorvoAnalysts estimate Qorvo had revenue of $819.52 million in the quarter ended Dec., down 3 percent from a year earlier. The average analyst estimate is down $81 million in the past four weeks.

The stock has lost about 3 percent since Apple’s announcement through Jan. 8 It is expected to report results Jan. 30
Lumentum HoldingsLumentum is expected to post an 11 percent decline in revenue in the three months ended Dec. To $358.5 million. The estimate has decreased $1.23 million in the past four weeks.

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