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Apple shares slid below $400 yesterday for the first time since December 2011, as investors braced for the company’s first quarterly profits decline in a decade.
The tech giant reports results next week, but Wall Street wasn’t waiting for the official word before heading to the exits.
After the markets closed on Tuesday, Cirrus Logic, a supplier of audio chips to the iPhone and iPad, reduced its revenue forecast for the year and said it was facing an inventory glut.
Investors took the news as a sign that Apple is facing reduced demand for its gadgets.
“We blame Apple for losing its mobility mojo,” Vernon Essi, an analyst at Needham & Co., told clients yesterday.
Also yesterday, a report out of Taiwan said Apple cut orders for iPad mini parts by 30 percent.
Apple shares fell 5.5 percent yesterday, to $402.80 — after dipping as low as $398.11 in the early afternoon, its first taste of sub-$400 in 16 months.
Apple shares are down 43 percent from its all-time high of $705.07 in September.
There have been reports all year of Apple cutting orders throughout its supply chain, including LCD screens and memory chips.
Also, the parent company of Apple’s top manufacturer, Foxconn, reported a sales slide this week.
Partners’ pain has only reinforced the sentiment on Wall Street that Apple’s peak has passed.
Profits are under pressure, and now the company is expected to post a year-on-year drop in earnings in its second fiscal quarter ended in March.
Consensus among analysts is that Apple will reveal earnings of about $10 a share, at the high end of estimates, down from $12.30 during the same quarter last year.
Forecasts for the June quarter also could disappoint, analysts said. Apple is likely to prepare its next product cycle for the second half of the year. Consumers usually stop buying iProducts in anticipation of an update.
“We expect Apple to provide guidance below consensus for the June quarter with regard to revenue and gross margins, Barclays analysts said in a note to clients.
CEO Tim Cook needs to retake control of the narrative surrounding the company, Barclays said.
While Apple is notoriously secretive, Wall Street is hoping to get some sense of how the company plans to re-ignite its growth engines next week.
New product categories are key to that effort as markets for smartphones and tablets mature.
Barclays called the TV market a $350 billion opportunity for Apple. Also, an iWatch, a smart device for the wrist, is rumored to be in development.
Investors also await a decision from Apple about its $137 billion in cash, a portion of which could be returned to shareholders.
“We believe Apple has the potential to double its level of capital returns over the next 3 years if it were to tap into the potential of its balance,” Barclays analysts said.