This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple iPhone 5: Reading the Tea Leaves

Stocks in this article: AAPL QCOM SWKS TQNT CRUS

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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs