NEW YORK ( TheStreet) -- This week Apple (AAPL) shares fell below $400 for the first time since December 2011, but closed above that level on the back of weaker-than-expected-results from one of its suppliers, Cirrus Logic (CRUS). Apple shares reached levels not seen since January 2012.
Cirrus Logic, which provides chips for Apple's products, also announced that it "will take net inventory reserve of $23.3 million of which approximately $20.7 million is due to a decreased forecast for a high volume product."
For the company's first quarter which ends in June, Cirrus Logic said it expects revenue to be between $150 million and $170 million. Analysts polled by Thomson Reuters are expecting $182.38 million in revenue.
"We feel investors have been waiting for expectations to be reset lower following broadly held concerns over iPhone 5 and iPad 4 demand," Canaccord Genuity analyst Bobby Burleson wrote in a note. The analyst lowered his Cirrus price target to $25 from $30.Apple Closes Above $400, Falls Sharply on Growth Concerns
Verizon (VZ) said Thursday that it activated 4 million iPhones from Apple (AAPL) in its first quarter. The good news is that's a 25% increase compared to the same period a year ago. The bad news is that people are still flocking to older phones. Verizon iPhone Sales Rise 25% Though Apple Concerns Remain "It would not surprise me to see another revenue miss from Apple, given the lower average selling price (ASP) associated with the older iPhones," said TheStreet's Chris Ciaccia. "Should the ASP come down on iPhones, that could be another reason for the telecoms to think about playing hardball on subsidies," Ciaccia added. Ciaccia noted that Verizon, AT&T (T), et al. pay a large subsidy to Apple on the iPhone, as much as $400, initially easing the cost for consumers. "That could force a reworking of the deal, though I suspect that's probably something for 2014 or 2015, if at all. I'd put the likelihood of a subsidy cut anytime in the next 12 months at 10% or less." He notes that it'll be interesting to see what AT&T has to say when it reports earnings next week. The telecom giant reports on the same day as Apple.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV