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Apple's stock price continues downward trajectory

The Apple iPhone XR was released in October 2018. (Source: Apple)
The Apple iPhone XR was released in October 2018. (Source: Apple)
Stock prices for Apple have fallen again today, reaching a low of US$193.79 in the late morning. The price stood at US$204.47 at the previous close, meaning the Cupertino-based company has seen more billions of dollars wiped off its market cap. The new plunge has been attributed to an updated business outlook statement from Lumentum.

Apple has taken another beating in the stock market today. At the time of writing, the company’s stock price stood at US$195.42. This would give the tech giant a value of US$927 billion, which is a considerable fall from the heady days of being labeled a trillion-dollar company. Previous drops have been attributed to the news that Apple intends to remain tight-lipped in regard to product sales breakdowns and the reduction in XR production.

This latest fall has been connected to a new statement published by Lumentum, a company that provides Apple with laser technology for Face ID systems. The updated business outlook has reduced net revenue from a forecast US$405-430 million to US$335-355 million. What will be of most concern to investors is the decrease in non-GAAP diluted net income per share: The initial US$1.60-1.75 estimate now stands at US$1.15-1.34. A telling comment by the company’s CEO, Alan Lowe, explains the more negative outlook:

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.

It has been speculated that Apple is the "customer" in question and that the iPhone XR might not be commanding the amount of sales desired. The company is still way ahead in terms of market capitalization of both Microsoft (US$824 billion) and Amazon (US$811 billion), but this is unlikely to stop Apple investors from feeling nervous about the current downward trend.


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Daniel R Deakin, 2018-11-12 (Update: 2018-11-12)