Buffet buys AAPL. AAPL Suppliers will win
Shares of three prominent chip makers, all tied to Apple’s (AAPL) fortunes, reported mixed results this week, after Apple’s iPhone sales, disclosed Tuesday afternoon, came in less than expected, and amidst an unending barrage about how terrible the smartphone market is at the moment.
But all three suppliers also notched up handsome gains.
Qorvo (QRVO) and Skyworks Solutions (SWKS), as the only standalone makers of amplifier chips for wireless signals, regularly compete for Apple’s business in the latest iPhone models. Their shares were up this week 14.6% and 9.5%, respectively.
And Universal Display (OLED) is a maker of technology that gets used in the most advanced screens for smartphones, referred to as organic light-emitting diode technology, or OLED, hence the ticker symbol. Its stock rallied 8.6% for the week, as of midday Friday.
All three had some fairly mixed things to report, a shortfall in their immediate prospects for revenue because of the weak smartphone market.
But the bad parts of their reports seemed to imply upside. This is the trough, things will get better with the next iPhone.
Qorvo on Wednesday afternoon beat fiscal Q4 revenue and profit that beat, but forecast this quarter sharply below consensus.
Skyworks last night reported fiscal Q2 revenue and earnings slightly ahead of expectations, and cut its outlook for this quarter from a prior forecast. The guidance for revenue of $875 million to $900 million is now more than $40 million below the average estimate for $931 million.
Also last night, Universal Display cut its outlook for this year, after last quarter’s revenue missed expectations. The company said customers are “digesting” some of its OLED capacity and that is going to suppress results until later this year.
The new revenue forecast from Universal Display, $280 million to $310 million, is sharply below consensus for $364 million.
In each of these three cases, investors have said they don’t care about the depressed results, as it only sets things up better for next year. |
