Apple (AAPL) Sinks Component Makers

NEW YORK (TheStreet) -- Overnight, Apple (AAPL) shares saw an inevitable pullback once lofty expectations were not exceeded. As shortsellers turn bearish on the stock, these suppliers of vital modules to the Apple portfolio took a dive in morning trading. 

The biggest decliner? Cirrus Logic (CRUS), slated to report after the bell, derives a large chunk of revenue from its contracts with Apple -- at least 80% of total sales, according to Oppenheimer analyst Rich Schufer. The circuitmaker supplies audio amplifiers and codec (components designed to encode data stream) to many Apple products, though lost out on an audio amplifier socket in the iPad Air to Maxim Integrated Products (MXIM). By mid-morning, Cirrus shares have taken off 4.9% to $18.66.

Another integrated circuit supplier Skyworks Solutions (SWKS) has shed 3.6% to $29.30, while TriQuint Semiconductor (TQNT), a radio frequency chipmaker, dipped 0.83% to $8.39.

Apple, which reported after market close Monday, beat earnings estimates, with first-quarter net income of $14.50 a share exceeding Thomson Reuters' expectations by 43 cents. However, the sale of 51 million iPhone units over its first quarter ended December fell short of Wall Street expectations of at least 56 million units sold.

TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A+. The team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

TheStreet Ratings team rates CIRRUS LOGIC INC as a Buy with a ratings score of B-. The team has this to say about their recommendation:

"We rate CIRRUS LOGIC INC (CRUS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CRUS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.31, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CIRRUS LOGIC INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 212.77% to $54.39 million when compared to the same quarter last year. In addition, CIRRUS LOGIC INC has also vastly surpassed the industry average cash flow growth rate of -8.40%.
  • CIRRUS LOGIC INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CIRRUS LOGIC INC increased its bottom line by earning $1.99 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($2.64 versus $1.99).

TheStreet Ratings team rates SKYWORKS SOLUTIONS INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate SKYWORKS SOLUTIONS INC (SWKS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SWKS's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 11.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SWKS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.52, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 44.11% and other important driving factors, this stock has surged by 43.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SWKS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SKYWORKS SOLUTIONS INC has improved earnings per share by 44.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SKYWORKS SOLUTIONS INC increased its bottom line by earning $1.44 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.44).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 42.1% when compared to the same quarter one year prior, rising from $66.50 million to $94.50 million.

TheStreet Ratings team rates TRIQUINT SEMICONDUCTOR INC as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate TRIQUINT SEMICONDUCTOR INC (TQNT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 24.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TQNT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, TQNT has a quick ratio of 1.55, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TRIQUINT SEMICONDUCTOR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRIQUINT SEMICONDUCTOR INC swung to a loss, reporting -$0.16 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.16).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TRIQUINT SEMICONDUCTOR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$27.61 million or 486.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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