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More Wall Street analysts lowered their iPhone sales estimates on Tuesday following reports of production cuts by Apple‘s (AAPL) supply chain partners. Apple stock was initially down but later managed a gain.
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Goldman Sachs analyst Rod Hall cut his iPhone sales estimate for Apple’s fiscal 2019 by 5.5%. He now expects Apple to sell 202.9 million units in its fiscal year, which started Sept. 30. He previously forecast sales of 214.8 million units.
He also trimmed his 12-month price target on Apple stock to 209 from 222 and reiterated his neutral rating. Apple stock rose 1.4%, near 196.80, in morning trading on the stock market today.
Hall made the changes after Lumentum Holdings (LITE) on Monday slashed its fiscal second-quarter revenue and profit guidance because an unnamed customer, believed to be Apple, materially reduced its orders. Lumentum makes 3D sensors that power the facial recognition technology on Apple’s latest iPhones. Other iPhone parts suppliers have lowered their estimates as well, including Japan Display and Skyworks Solutions (SWKS).
Hall reduced his unit sales estimates for the high-end iPhone XS and XS Max and the midrange iPhone XR. But he increased his estimates for older, lower-priced iPhone models.
IPhone Chipmaker Qorvo Cuts Forecast
On Tuesday, iPhone chip supplier Qorvo (QRVO) cut its December-quarter revenue and profit forecast “due to recent demand changes for flagship smartphones.”
The Greensboro, N.C.-based company now expects revenue in its fiscal third quarter of $800 million to $840 million. That’s down from its prior target range of $880 million to $900 million. Qorvo gets about 40% of its revenue from Apple business.
“Qorvo’s forecast of demand from China-based handset manufacturers remains measured and largely unchanged,” the company said in a news release. “Qorvo’s current forecast of demand across markets served by Qorvo’s Infrastructure and Defense Products segment are tracking within the range of its prior expectations.”
Qorvo also lowered its forecast for earnings per share to $1.70 from $1.95 in the December quarter.
Analyst Predicts Decline In iPhone Sales
TF International analyst Ming-Chi Kuo on Monday cut his estimates for iPhone XR shipments significantly, to 70 million from 100 million units, through September 2019, 9to5Mac reported.
Kuo kept his December-quarter iPhone sales forecast of about 80 million units. He believes higher sales of XS handsets and legacy models will offset weakness in XR sales. Apple sold 77.3 million iPhone units in the December quarter last year.
But Kuo believes iPhone unit sales will turn negative in the March quarter. He estimates Apple will ship 47 million to 52 million iPhones in the March quarter, vs. 52.2 million in the year-earlier period.
Apple announced earlier this month that it will no longer report iPhone unit sales.
JPMorgan on Monday lowered its iPhone sales forecasts for this calendar year and the next two years. It cut its iPhone sales forecast by 2 million units for this year to 214 million handsets. It reduced its expectations for 2019 by 10 million units to 208 million and for 2020 by 10 million units to 210 million.
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