This Day On The Street
Continue to site
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

Which Apple Suppliers are the Most Vulnerable?

What's bad for Apple is bad for Apple Suppliers. Should a falling share price concern investors in Apple's suppliers?

Disappointing guidance from Apple (AAPL) was enough of a reason for investors to sell and pull its shares below $500. Worse still was the damage done to shares of Apple suppliers Cirrus Logic (CRUS) and InvenSense (INVN). These companies also dropped sharply after they reported quarterly results. Are things really that bad for Apple’s suppliers?

Click on the chart below to view Apple's share price over time. 

Cirrus Logic started the selloff by guiding fourth quarter revenue lower. The consensus revenue estimate from analysts was $173.8 million, but Cirrus Logic expects revenue to be as low as $130 million. In its recently reported Q3, sales from its audio product segment dropped by nearly one-third to $206.4M. 

InvenSense reported Q3 earnings of $0.15 per share on revenue of $66.7M. Both figures missed consensus. GAAP earnings were $0.00 per share (the company actually lost $0.2 million). The company did add cash during the quarter: cash and cash equivalents rose to $266.3M, compared to $200.3M last year.

Two noteworthy figures in the statement of income are on the expense lines. Costs (SG&A and R&D) rose for both:

Screen Shot 2014-02-03 at 3.05.24 PM

Higher R&D activity means the company is adding innovation for its products, which is good news for investors.
In addition, cash flows from operating activities indicates higher inventories. Cash flows rose to $29.6M, compared to $6.56M last year.


Risks for Cirrus Logic will rise if Apple’s growth slows in the next few years. More than 80% of revenue may come from Apple alone. Conversely, investors might look instead at companies less reliant on Apple. This includes Broadcom (BRCM), Qualcomm (QCOM), Synaptics (SYNA), and Skyworks (SWKS).

Do you think Apple's forward guidance could spell trouble for its suppliers?  Use the list below to begin your analysis and let us know what you think in the comments. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 -1.04%
FB $118.06 0.54%
GOOG $695.70 0.48%
TSLA $222.56 -4.20%
YHOO $36.00 -0.03%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs