Apple Shares Tumble 9% To Lowest Since July 2017

After sowing chaos in global markets - triggering a flash crash in several AsiaPac currency pairs and a broad-based sell-off in Asian indexes - by cutting its quarterly revenue guidance for the first time in 16 years, Apple is watching its shares on Thursday morning disintegrate, erasing a rally that briefly drove its market capitalization near $1.1 trillion over the summer. In a move that portends a disastrous open for US indexes, Apple shares dropped 9.3% during premarket trading to $143.25, their lowest level since July 2017. The stock is now down 37% from its all-time high of $232.07 hit on October 3, and the rate of descent now approaching that of cryptocurrencies.

Apple

Apple shares were halted in late-day trading on Wednesday after Tim Cook warned investors that Apple was slashing its Q1 revenue guidance, saying "our revenue will be lower than our original guidance for the quarter" and blaming it all on iPhone sales in China, i.e., "lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfalls to our guidance and for much more than our entire year-over-year revenue decline." Cook delivered the unwelcome news just a few months after the company sparked a mini-panic by informing investors that it would no longer break out iPhone sales - one of the company's most heavily scrutinized sales metrics.

The pain would not be limited to Apple, however, which has seen a barrage of sell-side downgrades on the news: Raymond James has warned that faltering iPhone sales will filter through to Apple's suppliers, which have also been hurt by the selloff, per Bloomberg:

All component suppliers are likely to be hurt by Apple Inc.’s "significant miss," and face "a cascade of downward revisions as this news is digested," Raymond James’s Chris Caso wrote in a note. Caso reduced his models for Apple, Broadcom Inc., Qorvo Inc. and Skyworks Solutions Inc.

Skyworks shares are down 6 percent in pre-market trading; Broadcom’s are falling 2 percent, while Apple tumbles 8.9 percent.

Raymond James’s updated expectations for iPhone unit shipments flow through to all supplier models, Caso said, and he assumes Apple hasn’t yet made cuts to suppliers, as the firm waited to announce results publicly before supplier cuts last quarter. He didn’t assess the possibility Apple will choose to "end-of-life" one or more iPhone models - as the company did with the iPhone X last year = which would trigger an even sharper production drop.

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