Barrons : Apple Is Slashing iPhone Production Orders for Its New Models, Analyst

Apple Is Slashing iPhone Production Orders for Its New Models, Analyst Says

Apple is cutting production orders for its latest iPhone models, according to Longbow Research.

The firm’s analyst Shawn Harrison said Apple suppliers are shifting production from new iPhone models to older phones.

The smartphone maker’s $749 iPhone XR became available for sale on Oct. 26. That followed the launch of the $999 iPhone XS and the $1,099 iPhone XS Max in September.

“The iPhone story is showing cracks with contacts now citing weaker iPhone orders year over year,” the analyst wrote on Monday.

Harrison said his checks with Apple suppliers last week revealed order cuts of 20% to 30% for the iPhone XR and XS Max, while older iPhone models such as the 8 and the 8 Plus had order increases of 20% to 25%.

He estimates the cuts on the XR and XS Max represent a reduction of more than 12 million units, while the production increase on older models is more than 3 million units. The analyst said there was no change to XS plans.

Apple stock is down 3.7% to $196.92 in early morning trading on Monday. The company did not immediately respond to a request for comment on the report.

The analyst also pointed to falling search-engine interest in China for iPhones.

“Baidu iPhone searches fell off a cliff for October, indicating potential risk of faltering China demand,” he wrote.

The Longbow note came after KeyBanc Capital Markets analyst John Vinh said on Thursday iPhone XR inventory is piling up at stores due to weak sales.

In similar fashion, The Nikkei Asian Review also reported last week the tech giant is telling its suppliers to cancel plans for additional iPhone XR production lines.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • GNC -20.6%, ACM -5.3%

M&A news:

  • SAP -4.9% (to acquire Qualtrics for $8 bln in cash)

Select EU financial names showing weakness:

  • BCS -3.6%, LYG -2.9%, SAN -2%, DB -2%,

Select Tobacco related stocks trading lower after WSJ article details possible FDA ban on menthol cigarettes:

  • BTI -7.8%, MO -4.8% PM -1.0%

Other news:

  • MHLD -29% (Maiden Holdings and Enstar Group (ESGR) agree to loss portfolio transfer of Maiden Re's AmTrust quota share)
  • BZUN -12.5% (following Singles Day)
  • AMRN-12.3% (following AHA presentations)
  • AAPL -2.2% (after Lumentum (LITE, halted) cuts guidance based on what seems like reduced shipments for its 3D sensing lasers, a key component for Face ID)
  • INSG -2% (files for 20,793,700 share common stock offering by holders)
  • AMPH -1.3% (files for $250 mln mixed securities shelf offering)
  • BABA -1.1% (following Singles Day)

Analyst comments:

  • ADMP -9.4% (downgraded to Neutral at B. Riley FBR)
  • PLNT -3% (downgraded to Neutral from Outperform at Macquarie)
  • SCCO -2.8% (downgraded to Sell from Neutral at Citigroup)
  • SWKS -2.8% (downgraded to Neutral from Buy at Citigroup)
  • CAKE -2.7% (downgraded to Underweight from Equal Weight at Barclays)
  • KERX -2.5% (downgraded to Mkt Perform from Outperform at Raymond James)
  • HA -1.9% (initiated with a Sell at Goldman)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • ATHN +9.3%, OPK +8.1%, ATHM +3.4%, ACB +3.2%

M&A news:

  • APTI +51.5% (to be acquired by an affiliate of Vista Equity Partners for $38.00/share in cash)
  • CCRC +34.4% (receives non-binding 'Going Private' proposal for $16.00 per share)
  • ISCA +6% (NASCAR makes non-binding offer to acquire ISCA for $42/share)

Other news:

  • EIDX +12.9% (reports positive Phase 2 Data for AG10)
  • LCI +10.1% (enters into agreement with Amneal Pharmaceuticals for Levothyroxine)
  • FATE +5.9% (clinical data of FATE-NK100 and provides regulatory update on landmark IND application for FT500)
  • NKTR +4.9% (presents new efficacy, safety and biomarker data its Immuno-Oncology pipeline)
  • ZIOP +2.4% (enters securities purchase agreements for the sale of its common stock and warrants to purchase common stock in a private placement that is expected to result in gross proceeds to the Company of ~ $50 million)
  • ESPR +1.9% (presentation of Final Study 3 results)
  • CRVS +1.8% (updated results from CPI-444 and CPI-006 )
  • ZFGN +1.1% (entered into $50 mln at-the-market offering sales agreement with Cowen) . 

Analyst comments:

  • CROX +8.4% (upgraded to Neutral from Negative at Susquehanna)
  • LB +2.9% (upgraded to Outperform from Market Perform at Wells Fargo)
  • AAL +1.3% (initiated with a Buy at Goldman)

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • APTI +50.7%, CCRC +34.4%, PAGS +5.6%, SBGL +4.2%, AMRN +3%, LB +2.7%, RIG +2.4%, BBL +1.5%, FRAC +1.2%, BHP +1.1%, EQNR +1.1%, RIO +0.9%, MOMO +0.9%, JD +0.7%, SHPG +0.7%

Gapping down:

  • BTI -7.5%, MO -4.6%, STM -3.4%, BCS -3.3%, SCCO -2.8%, ASML -2.6%, MRT -2.5%, LYG -2.3%, SAN -2%, HA -2%, PM -1.5%, DDD -1.5%, DB -1.4%, GOLD -1.3%, ABB -1%, JONE -0.8%

>>> OHL tried to merge with ACS’s affiliate Dragados in 2016 - reported rumour (

OHL tried to merge with ACS’s affiliate Dragados in 2016 - reported rumour (translated)

Obracon Huarte Lain, OHL, [BME.OHL] tried to negotiate a merger with ACS's [BME:ACS] subsidiary Dragados in 2016, when Villar Mir was president of OHL, El Confidencial reported.
The negotiations included a capital increase and a genarational relay. ACS CEO and executive arm of Florentino Pérez Marcelino Fernández Verdes analysed the possible transaction, but the accounts did not come out for any of the potential partners, the item said.
According to the report, Villar Mir had remote hope that ACS President Florentino Perez would answer his knock on the door for help since, in ACS's worst moments, when its assault on Iberdrola put the company's financial stability in check, the white knight had been OHL, El Confidencial added.