“We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter,” Lumentum President and CEO Alan Lowe said.
While Lumentum didn’t cite Apple specifically, analysts are quick to point at the iPhone maker.
“We think investors should consider Lumentum’s updated guide as reflecting as much as a 30 percent cut in Apple orders,” said Wells Fargo analyst Aaron Rakers.
Multinational investment firm UBS cut its 12-month price target of Apple by $15 to $225 and lowered its iPhone unit sales forecasts for the current quarter by 1.5 million to 73.5 million.
“We note these cuts are significantly less than the LITE news would imply,” said Tim Arcuri of UBS in his note. “Ultimately, we believe AAPL continues to face FX headwinds given ongoing [U.S. dollar] appreciation against key global currencies. In China, given [the dollar-yuan trade], the supply chain suggests many consumers are opting for high-end models w/similar specs from local competitors rather than the XR.”
Despite beating earnings and revenue expectations for its fourth fiscal quarter, murky forecasts for iPhone sales caused investment firm Rosenblatt Securities to downgrade the stock. Rosenblatt Securities changed their rating from “buy” to “neutral,” citing that higher iPhone prices won’t offset a weaker sales volume.
Bank of America Merrill Lynch issued a similar downgrade following the earnings report for “slower growth in app store revenue, especially in China; guidance for the December quarter that implies weaker-than-expected iPhone unit sale; investors will likely interpret ending iPhone unit sales figures as negative; and weaker growth in emerging markets because of the stronger dollar.”
“Calendar fourth-quarter guidance reflects our cautious view on weaker than expected sell-through and production reductions for iPhone XS/XR,” said analyst Jun Zhang. We “downgrade to neutral.”
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