Following a report stating a slowdown in the sales of Apple’s latest flagship product, the technology giant’s parts supplier Laird has now issued a negative warning regarding its upcoming earnings report. Laird is known to be the manufacturer of the chips used in the Bluetooth feature of apple’s devices.
According to Laird, the company is now expecting a sharp drop in their profits for the year due to an “unprecedented” pricing pressure and a slow growth in the sale of smartphones particularly in Apple’s latest iPhone 7.
The profit warning led Laird’s shares to drop to almost 50%. Based on speculations from analysts, Apple comprises 17% of Laird’s revenue accounting for the huge impact of Apple’s sales in the shares of Laird. This also marks Apple’s third consecutive decline in the sales of their flagship iPhone where sales have reportedly dropped by 15%.
The issue also adds up to Laird’s recent problems with Samsung who is also a Laird customer.
Aside from the decline in the sales of Apple’s iPhones, Laird also faced pressure on the prices of their materials which are being supplied to smartphone company and makers.
The 48% decline in the shares led the British technology company to lose almost 420 million pounds from their market value and capital.
Laird shares dropped sharply at a 48% decline following the warning regarding its upcoming earnings report stating a possible decline in their earnings due to a corresponding decline in the sales of smartphones, particularly from Apple.
From the recent trading session, the stock closed at 308.50 from an opening price of 310.60 trading the highest at 311.90 before dropping the following trading session at 158.40.
The RSI Indicator which is pointed sharply below the 30 level indicated that the stock also has been oversold.
The stock is set to rally in the coming sessions but not anywhere to near in recovering the previous $308 price level until final third quarter earnings report confirms suspicion over the company.
The warning given by Laird regarding their profits did not just send their own shares down but also raised concerns on how the company has failed to reach some gains for the company’s biggest department which are their materials division responsible for the production of smartphone parts.
The slowdown in smartphone sales also dates back to a report that the growth would only be half of the forecasted in 2015 which is 7% so as to there wouldn’t be a surge in smartphone sales to be expected until next year.
Laird’s current CEO has also just been operating for six weeks as the company is undergoing a transition due to its previous CEO David Lockwood’s switch to British aerospace and defense company Cobham leaving Laird’s CFO Tony Quinlan has been appointed to take over since September 5 whose focus is currently on the company’s Wireless Automation and Controls division.