===Cirrus Logic (CRUS) : Apple (AAPL) to abandon a highly anticipated feature in its iPhone 15 Pro

 

Apple (AAPL) will likely abandon a highly anticipated feature in its iPhone 15 Pro models, according to a report Wednesday that hammered supplier Cirrus Logic (CRUS). CRUS stock hit a three-month low.

Due to unresolved technical issues, the iPhone 15 Pro and Pro Max probably won't feature solid-state buttons, TF International Securities analyst Ming-Chi Kuo wrote in a Medium post. These buttons would have replaced the physical power and volume buttons and instead relied on haptic feedback from users.

"Investors had anticipated that the new solid-state button design would increase suppliers' revenue and profits," according to the report. "Thus, this change is particularly unfavorable for Cirrus Logic and AAC Technologies."

In morning trading on today's stock market, CRUS stock went into free fall, diving 14.3% near 87.30. Shares of AAC Technology Holdings (AACAY), which trade over the counter, slumped 14.9% near 2. Apple stock inched 0.2% ahead, trading near 161.10.

CRUS Stock: iPhone 15 Still Expected On Time

The iPhone 15 is still in the earliest stage of development, so there's still time for Apple to make some changes, according to the report.

"Based on these factors, removing solid-state buttons should have limited impact on the mass production schedule and shipments for Pro models," Kuo said.

But CRUS stock took a hit on the report. The company is Apple's exclusive supplier for a key component in the rumored solid-state buttons. AAC and Luxshare ICT supply Apple with another component, but larger Luxshare will be less affected because it has a significantly larger operating scale, Kuo said.

Highly Rated Chip Stock

Shares of Cirrus Logic have soared this year. They broke out of a flat base with a buy point at 108.52 in late March, according to MarketSmith.com. CRUS stock later fell as much as 6.5% below that entry, putting the breakout at risk. Investors should sell when a stock falls 7%-8% below its buy point.

The news Wednesday put highly rated CRUS stock well below that buy point.

-=Universal Display (OLED) reported earnings on Thur 20 Feb 20 (a/h)

Universal Display Cracks On Fourth-Quarter Miss, Coronavirus Warning
OLED display specialist Universal Display (OLED) late Thursday badly missed Wall Street's targets for the fourth quarter. It also warned that business interruptions from the coronavirus outbreak in China would crimp its sales. The Universal Display earnings news sent OLED stock sharply lower in extended trading.

The Ewing, N.J.-based company earned 56 cents a share on sales of $101.7 million in the December quarter. Analysts had forecast Universal Display earnings of 74 cents a share on sales of $103 million. In the year-earlier period, Universal Display earnings were 40 cents a share on sales of $70.1 million.

Universal Display guided to 2020 revenue of $430 million to $470 million. The midpoint of $450 million is below Wall Street's consensus estimate of $496 million. It posted 2019 sales of $405.2 million.

Universal Display makes technologies and materials used in OLED displays for smartphones, televisions and other devices. OLED is short for organic light-emitting diode. It also produces OLED lighting products.

OLED Stock Down In Late Trading
Universal Display stock tumbled 5.6% in after-hours trading on the stock market today. During the regular session ahead of the Universal Display earnings, OLED stock slipped a fraction to 178.77.

Universal Display stock hit an all-time high of 230.32 on Sept. 6. But over the next four weeks, it fell 31% before beginning to recover.

On Dec. 26, OLED stock broke out of a cup-with-handle base at a buy point of 208.11. During the next two weeks it climbed to a recent high of 222.20 on Jan. 9. It then trended sideways before it tumbled on concerns the China coronavirus outbreak would impact its business. That fall triggered the loss-cutting sell rule, under IBD trading principles.

In a Jan. 27 report, Susquehanna Financial Group analyst Mehdi Hosseini said the coronavirus epidemic could impact Universal Display's ability to ship materials into China's Wuhan, a major manufacturing hub. Wuhan is ground zero for the Covid-19 coronavirus outbreak.

OLED stock was under pressure ahead of the Universal Display earnings report. OLED stock has a middling IBD Relative Strength Rating of 52. The Relative Strength Rating measures a stock's 12-month performance on a 1-99 scale against all other stocks.

China Represents About 15% Of Universal Display Sales
Two of the leading Chinese OLED display manufacturers — CSOT and Tianma — have most of their OLED manufacturing facilities in the Wuhan area, Hosseini says. Universal Display is a key supplier of emitter material used in displays built by those companies, he says.

"We estimate about one-third of China's total OLED manufacturing capacity is located in Hubei province, including its capital city, Wuhan," Hosseini said.

China accounts for about 15% of Universal Display's total revenue, Hosseini says.

Universal Display Earnings Report Brings Dividend Hike
Also Thursday, Universal Display announced that it is raising its quarterly cash dividend by 50% to 15 cents a share. Its prior quarterly dividend was 10 cents a share.

The dividend is payable on March 31 to shareholders of record on March 17.

-=Lumentum (LITE) lowers Q2 guidance based on reduced shipments of its 3D sensing lasers

• Lumentum (LITE) cuts Q2 guidance based on what seems like reduced shipments for its 3D sensing lasers, a key component for Face ID in the iPhone , noting "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter."

• Lowers Q2 EPS to $1.15-1.34 from $1.60-1.75 vs $1.67 S&P Capital IQ Consensus; revs to $335-355 mln from $405-430 mln vs $420.47 mln S&P Capital IQ Consensus
• "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," said Alan Lowe, President and CEO. "With our proven ability to deliver high volumes, years of experience, hundreds of millions of devices in the field, and new product and customer funnel, we remain confident in our leadership position in the nascent market for laser diodes for 3D sensing."
• Note the customer is likely Apple (AAPL), which seems to confirm shipment cuts reported by Nikkei last Monday.
• Lumentum is the main supplier for vertical-cavity surface-emitting lasers (VCSELs), which enable 3D sensing (Face ID) technology in Apple's (AAPL -2.8%) iPhone. This jives with what the Nikkei reported one week ago, that Apple had recently cut orders for the iPhone XR and increased orders for the iPhone 8 and 8 Plus. The iPhone XR is the newest lower cost option while the 8/8+ are last year's cheaper models without 3D sensing/Face ID capability.
• Recall Apple offered soft guidance for the holiday quarter on November 1 while announcing it will no longer disclose product shipment disclosures going forward. Apple is using higher priced iPhones to drive growth in a stagnant/saturated smartphone market where the replacement cycle is getting longer. Bernstein said Apple's guidance implied shipments down 5-10% year-over-year.
• The number two and three VCSEL suppliers II-VI (IIVI -2.7%) and Finisar (FNSR -3.4%) announced a merger on Friday morning.

Skyworks (SWKS) reported earnings on Thur 8 Nov 2018 (a/h)

** charts after earnings **

 

• Skyworks (SWKS -9%) is trading at a 22-month low, leading chips stocks (SMH -2.6%) to the downside after guiding Q1 (Dec) below estimates. 
• Over the last month, pretty much every semiconductor company warned about December quarter results due to a slowdown in chip demand, confirming cyclical concerns that arose in early October. It seems tariff concerns may have pulled forward some demand. 
• However, Skyworks is a key Apple (AAPL -1.8%) supplier, so its cautious tone is adding to concerns after Apple's guidance for the holiday period the removal of shipment disclosures last week implied iPhone unit growth will be hard to come by going forward.

Skyworks beats by $0.02, reports revs in-line; guides Q1 EPS below consensus, revs below consensus

• Reports Q4 (Sep) earnings of $1.94 per share, excluding non-recurring items, $0.02 better than the S&P Capital IQ Consensus of $1.92; revenues rose 2.3% year/year to $1.01 bln vs the $1 bln S&P Capital IQ Consensus.
• Co issues downside guidance for Q1, sees EPS of $1.91, excluding non-recurring items, vs. $2.08 S&P Capital IQ Consensus; sees Q1 revs of $1.00-1.02 bln vs. $1.07 bln S&P Capital IQ Consensus.

=Apple (AAPL) : iPhone X demand concerns

Shares of Apple (AAPL) and iPhone chip suppliers fell Tuesday on reports that iPhone X demand is flagging, less than two months after its debut.

• Suppliers (SMH): LITE -3% SWKS -2.8%, QRVO -2.5%, CRUS -2.4%, FNSR -2%, MU -1.8%, AVGO -1.6%, JBL -1.5%, AMAT -1.3%, XLNX -0.6%, OLED -1%, TXN -0.3% STMicroelectronics (STM 21.97, -0.28)
• Apple will slash its sales forecast for the iPhone X in the quarter to 30 million units, the Taiwanese newspaper said on Monday, citing unidentified sources — down from what it said was an initial plan of 50 million units.
• Apple has not publicly disclosed quarterly sales targets for the iPhone X, which went on sale in November.
• JL Warren Capital and Sinolink Securities cut their iPhone shipment forecasts for the calendar first quarter of 2018, citing weak demand for the flagship iPhone X exiting the holiday sales quarter, Bloomberg reported Monday.  U.S.-based JL Warren Capital is predicting shipments of just 25 million units as consumers balk at the "high price point and a lack of interesting innovations."
• A Reuters analysis of Chinese social media shows that interest in the iPhone X — which spiked around its launch — has not kept pace with the highly popular iPhone 6 released in 2014, which helped then drive massive sales for Apple in China.  There were only 4.97 million Weibo posts mentioning the iPhone X so far in December compared with over 11 million for the iPhone 6 in the equivalent period in 2014, the analysis showed.

=Finisar (FNSR) to receive $390 mln as part of Apple's advanced manufacturing fund

Finisar is a manufacturer of optical communication components and subsystems. In 2008, Finisar merged with Optium Corporation.

• Headquarters: Sunnyvale, CA
• finisar.com
• Face ID tech company

• LITE also makes VCSELs for 3D sensing. IIVI is also in the space.

Finisar to receive $390 mln as part of Apple's advanced manufacturing fund  

Apple (AAPL) announced the latest award from its $1 billion Advanced Manufacturing Fund. Finisar, a leading manufacturer of optical communications components, will receive $390 million as part of Apple's commitment to support innovation and job creation by American manufacturers.

• As a result of Apple's commitment, Finisar will transform a long-shuttered, 700,000-square-foot manufacturing plant in Sherman, Texas, into the high-tech VCSEL capital of the US.

The award will enable Finisar (FNSR) to exponentially increase its R&D spending and high-volume production of vertical-cavity surface-emitting lasers (VCSELs). VCSELs power some of Apple's most popular new features, including Face ID, Animoji and Portrait mode selfies made possible with the iPhone X TrueDepth camera, as well as the proximity-sensing capabilities of AirPods.

VCSEL technology is a better performing, more compact and cost-efficient solution compared to traditional edge-emitting lasers for many emerging applications. Apple has rapidly adopted depth-sensing technology in recent years, leading to the development and production of the most advanced VCSELs used in the history of consumer electronics. In the fourth quarter of 2017, Apple will purchase 10 times more VCSEL wafers than were previously manufactured worldwide over a similar time period.

Description

Finisar Corporation (Finisar) is a provider of optical subsystems and components that are used in data communication and telecommunication applications. The Company's optical subsystems consist of transmitters, receivers, transceivers, transponders and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in these networks, including the switches, routers, and servers used in wireline networks. These products rely on the use of semiconductor lasers and photodetectors in conjunction with integrated circuits and optoelectronic packaging to provide a means for transmitting and receiving digital signals over fiber optic cable at speeds ranging from less than one gigabit per second (Gbps), to more than 100 Gbps, over distances of less than 10 meters to more than 2,000 kilometers, using a range of network protocols and physical configurations.

Key stats and ratios

	Q4 (Oct '17)	2017
Net profit margin	1.76%	17.20%
Operating margin	2.85%	12.20%
EBITD margin	-	18.77%
Return on average assets	0.90%	11.92%
Return on average equity	1.45%	18.26%
Employees	14,000

InvenSense (INVN ) to be acquired TDK Corporation for $13.00/share in cash

• InvenSense is an Apple supplier

  

 

TDK Corporation to acquire INVN for $13.00/share in cash :

• Co entered into a definitive agreement today wherein TDK agrees to acquire all of the outstanding InvenSense shares for cash at an acquisition price of $13.00 per InvenSense share, for a total acquisition price of $1.3 bln. The transaction has been unanimously approved by the Boards of Directors of both companies. Completion of the transaction is expected in second quarter of the fiscal year ending March 31, 2018, and is subject to approvals by InvenSense shareholders and the relevant regulatory authorities.
• Transaction brings together more complete portfolio of sensor and software solutions spanning inertial, pressure, microphone and ultrasonic wave sensor products and technologies from InvenSense, with TDK's pressure, temperature, electric current and various other sensors.
• Transaction will be financed with cash-on-hand.
• In January 2016, TDK established a joint venture with Qualcomm (QCOM), called RF360 Holdings Singapore PTE, Ltd., and has also entered into agreements to expand technical cooperation in a wide range of fields including passive components, batteries, wireless power transfer, sensors.