https://www.nhregister.com/connecticut/article/Apple-plummets-to-lowest-price-since-2011-11426857.php
Apple plummets to lowest price since 2011
Jeremy C. Owens, San Jose Mercury News
Published 12:00 am EDT, Wednesday, April 17, 2013
In this April 2, 2013, file photo, a man smokes near the logo of Apple in Shanghai, China.
CUPERTINO, Calif. -- Apple stock fell lower than $400 for the first time since 2011 on Wednesday, less than a week before a quarterly earnings report that is expected to show the tech giant's first decline in profits since the iPod helped push Apple back to the top of the technology mountain more than a decade ago.
Apple shares declined as much as 6.6 percent to $398.11 Wednesday before recovering slightly to close at $402.80, a 5.5 percent daily decline. The stock easily eclipsed Apple's previous 52-week low of $419 and pushed Apple lower than $400 a share for the first time since Dec. 23, 2011, while again costing it the title of highest market capitalization for a United States company.
Wednesday's descent continues Apple's steep decline deep into bear market territory: Since hitting an all-time high of $705.07 on the day the iPhone 5 launched in the United States, Apple shares have declined as much as 43.6 percent.
The fall indicates that investors believe Apple has peaked after a decade of spectacular success that began with the iPod and continued with the introduction of the iPhone and iPad, mobile devices that proved incredibly successful and changed consumers' computing habits, to the detriment of the personal computer industry. Analysts expect Apple to report in its quarterly report Tuesday that earnings per share were $10.13, according to Thomson Reuters, compared with profits of $12.30 in the same quarter a year ago.
Those sentiments are declining even more as next week's report nears, with Bernstein Research releasing a note predicting a "tepid quarter" on Wednesday, joining a trio of analysts who cut their price targets on the stock Tuesday.
"We note that March Street expectations still appear too high and that Apple is likely to guide June down," Piper Jaffray analyst and noted Apple bull Gene Munster wrote Tuesday.
Investors dumping Apple stock Wednesday could have their eyes on the companies that provide components for the tech giant's signature mobile devices. Audio-chip provider Cirrus Logic declined more than 15 percent Wednesday after reporting projected revenues far below consensus estimates, a possible signal that Apple is ordering fewer parts due to lessening demand. That news follows Japan Display's announcement Monday that it was looking for new buyers for its displays, which are used on the iPhone.
Cross Research analyst Shannon Cross told Reuters that the Cirrus report is "a reminder of weakening demand, and the challenges around product transitions" for Apple.
"There's not a lot of conviction about what the second half is going to look like," she added.
Jefferies analyst Peter Misek wrote in a note that Apple's sales could suffer in the current quarter, based on the Cirrus news. The company's lighter-than-expected revenue projection means Apple will likely not launch a refreshed iPad Mini in the quarter, Misek posited, while any new iPad launch would likely happen late in the quarter.
Apple's outlook is still strong, however, with revenues expected to set another record in the second quarter and more than $150 billion in cash sitting in the Cupertino company's coffers. Even that cash horde has become an issue, though, activist investors have agitated for Apple to return some of its cash to stakeholders; CEO Tim Cook has said the company is looking for a way to do that, but has said little about the effort since the company's annual shareholders meeting in late February.
Apple was not alone in its Wednesday descent, as Wall Street's main indexes and other tech companies also fell. The tech-heavy Nasdaq composite index declined 1.8 percent, while the Standard & Poor's 500 fell 1.4 percent; the Dow Jones industrial average -- the only major U.S. index to not include Apple -- moved lower by 0.9 percent.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.