Semiconductor stocks and sector-related exchange traded funds were among the worst performers Thursday after Apple’s (NasdaqGS: AAPL) poor quarterly assessment dragged on the tech giant’s global supply chain.
On Thursday, the VanEck Vectors Semiconductor ETF (NYSEArca: SMH) declined 5.7%, iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) decreased 5.5% and Invesco Dynamic Semiconductors ETF (NYSEArca: PSI) retreated 5.3%.
Weighing on the tech segment, Apple CEO Tim Cook revealed a lower Q1 guidance in a letter to investors. The company lowered revenue guidance to $84 billion from the $89 billion to $93 billion it previously projected, and it lowered gross margin to about 38% from between 38% and 38.5%, CNBC reports.
The tech giant pointed to a number of factors for the lowered guidance, such as a weakening economy in China, lower-than-expected iPhone revenue and the negative impact of the U.S.-China trade tensions. The lower-than-anticipated revenue happened “primarily in Greater China” and upgrades to new iPhone models in other countries were “not as strong as we thought they would be.”
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Cook said.