Apple supplier AMS cuts forecast, due to poor iPhone demand

Apple supplier AMS cuts forecast, due to poor iPhone demand
Apple supplier AMS cuts forecast, due to poor iPhone demand

Austria’s AMS (AMS.S), making facial recognition technologies, became the hottest Apple provider to lower its earnings forecast, including to growing proof that the hottest iPhones aren’t selling well.

The Swiss-listed team cut its fourth-quarter sales perspective by 15 per cent and pushed back its medium-term goals, attributing”recent need changes from a significant client”.

AMS, that specializes in detectors, failed to mention Apple as the client, but analysts estimate that the U.S. giant accounts for 40 percent of the group’s earnings.

Apple (AAPL.O) shocked investors two weeks back using a lower than anticipated sales prediction for the Christmas quarter, prompting providers including U.S. company Lumentum (LITE.O), British chipmaker IQE (IQE.L) and monitor manufacturer Japan Screen (6740. T) to issue warnings which led to weakness in brand new iPhone sales.

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Much like Lumentum, AMS provides Apple with software elements required for its own FaceID technology.

Anglo-German chip designer Dialog Semiconductor (DLGS.DE), that struck a $600 million agreement with all the U.S. technology giant month bucked the negative trend as it said late on Wednesday it doesn’t see a fall in demand from Apple.

Dialog justified this by pointing out that it provides a lot more goods than the hottest iPhones.

For the last year, investors had mostly been prepared to forget stagnating unit earnings of their iPhone because typical selling prices kept climbing. However, Apple currently faces fierce opposition from mid-priced telephones from manufacturers like Xiaomi Corp (1810. HK).

The California-based firm began selling its most recent phone creation, the iPhone XS and XS Max at September along with also the XR version.

The new AMS advice suggested between 11 and 18 million fewer iPhones will be generated from the fourth quarter compared to an originally estimated 77-82 million, Credit Suisse analysts said in a note to clients.

“That is mainly in-line to see from current Lumentum warning,” they said, including the Lumentum advice would have indicated an effects of 15-20 million iPhones.


AMS stocks gained up to 6.4{d08f825f8993e9339f57f9ee191e9751c5dd74579408b74e993695a69dbacad4} to 29.65 Swiss francs following a steep fall in early commerce.

They’ve lost almost 30 percent because Apple’s latest earnings release and therefore are down 70 percent since the start of the year and some investors see a buying opportunity, said investors.

AMS expects earnings to come in between $480 million and $520 million in the three months to Dec. 31, compared with the $570-$610 million it forecast last month.

The adjusted operating margin for the quarter is anticipated to reach the low to mid-teen proportion range after preceding advice for its margin to grow to 16-20 percentage.

AMS also left its 2019 earnings target of over $2.7 billion, saying it now expects annual double-digit earnings growth for the next several years.

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It aims to get a 30 percent adjusted operating margin but no longer provides a particular time period. It had postponed the goal to 2020 out of 2019 in July, in the time because of sequence delays from a significant customer.

“These men don’t have any visibility any more,” said Mark Taylor, senior sales trader at Mirabaud Securities’ International Thematic Group.

AMS, that has invested heavily in research and development and in manufacturing growth, is currently trying to tackle underutilized facilities, raising rivalry and its dependence on Apple.

Even though a variety of analysts have cut their own recommendations lately, many target cost recommendations continue to be over 40 Swiss francs. “I would not be surprised to see (the inventory ) rally,” explained Taylor.


About the author

Jennifer Rubin


Jennifer writes the reported opinion for SumoDaily. She covers politics and policy, foreign and domestic, and provides insight into the conservative movement, the Republican and Democratic parties, and threats to Western democracies. Rubin, who is also an MSNBC contributor, came to The Post after three years with Commentary magazine. Prior to her career in journalism, Rubin practiced labor law for two decades, an experience that informs and enriches her work. She is a mother of two sons and lives in Northern Virginia.

To get in touch with Jennifer for news reports she published you can email her on [email protected] or reach him out in social media linked below.

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