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Apple Share Price Falling on Analyst Report of Lower Orders

by Sean P. Aune | November 10, 2011

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Through out this week there have been numerous reports that read like a battle of the rumors over whether or not component orders from Apple had taken a nose dive in October. While there had been nothing more substantial than some folks calling Apple retail stores and confirming that they were sold out of some models of the iPhone 4S as proof that things were good, the latest bit of information is a bit more substantial.

Brian White of Ticonderoga Securities developed what he calls the “Apple Barometer” by which he measures the financials of some of Apple’s key component suppliers. He does leave out Hon Hai Precision, the parent company of Foxconn as they build so many different items for a fleet of companies, but those that he can measure add in to the overall picture formed by his measuring.

From his latest round of checks he found that it appears Apple had cut its part orders for October, leaving them only 16% year over year for the same month.  While an increase in orders sounds like a good thing, September had been up 62% year over year leaving many to wonder why there had been such a steep sequential decrease.  Mr. White wrote in a note to investors in regards to the news:

That said, when we tally up the combined September and October sales versus historical averages, the Apple Barometer still fell well short (~12% below) of what has been reported in the past. Although it is difficult for us to get our head around this weakness given what seems to have been a well received iPhone 4S launch so far and our expectations for a robust holiday season for Apple with the iPad 2 and MacBook Air, this report is too negative to ignore and we must carefully monitor the Apple supply chain over the next few weeks.

By no means should this be interpreted as Apple is about to crash and burn, and in fact White still lists Apple stock as a “Buy,” but it certainly does seem odd considering the meteoric growth the company had been enjoying the past few years.

Shares of Apple are currently (3:40 PM EST) down 2.79%, or $11.49, on the day, trading at $384.50.  This is off a high that came earlier this week of $406.93.

What do you think this decline in orders means for Apple?

[via Barron’s]


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Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...