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Apple iPhone 5: Reading the Tea Leaves

NEW YORK ( TheStreet) -- When Apple (AAPL - Get Report) reported its third-quarter results, investors initially punished the company for a rare earnings and revenue miss. The tech giant's suppliers, however, have soared following their reports.

Apple's third-quarter earnings report fell well short of Wall Street expectations, and CFO Peter Oppenheimer cited a variety of different reasons. These included economic weakness in Europe, Australia, Canada, and Brazil and a delay with Intel's (INTC) Ivy Bridge chips which hurt Mac sales in April and May. A major factor, though, was also consumer speculation about new products which caused purchasing delays.

Given the earnings reaction to Apple suppliers such as Qualcomm (QCOM - Get Report), Skyworks Solutions (SWKS - Get Report), TriQuint Semiconductor (TQNT) and, most recently, Cirrus Logic (CRUS - Get Report), the speculation about the "fall product transition" is well founded. Qualcomm, for example, is ramping supplies of its 28-nanometer chipset in anticipation of a strong December quarter, which may signal new Apple products.

A new iPhone and perhaps more are coming; and they're coming soon. Speculation has been mounting that Apple may launch the iPhone 5 on September 12. There has also been chatter about an iPad Mini making its debut around the same time, as well as an iPod Touch refresh. Apple could not be immediately reached for comment on this story.

The second-quarter revenue guidance provided by another Apple partner, Cirrus Logic, on Monday, could indicate something big happening sooner rather than later. Cirrus forecast revenue between $170 million and $190 million -- a 70% sequential increase, sharply higher than the $129.65 million Wall Street was looking for.

Oppenheimer analyst Rick Schafer attributed the strong guidance to Cirrus Logic parts in Apple products. "We believe the massive 2Q raise is driven primarily by Apple content increases," Schafer wrote in a research note.

In particular, the analyst pointed to a 73% quarter-over-quarter inventory increase in the first quarter, which is expected to grow more than 50% in the second quarter. "We believe the additional inventory build to be a good indicator of December quarter revenues, which management expects to be up significantly over September," he added. "Despite lofty expectations heading into the call, we look for shares to trade better Tuesday following management's blowout second-quarter guide and bullish second-half commentary."

Schafer has a 'perform' rating on Cirrus Logic shares.
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