A surge in profits at Apple has done little for its UK listed suppliers.
The US company reported a 33% rise in second quarter profits to a better than expected $13.6bn, helped by the sale of 61.2m iPhones and a strong performance in China. Apple’s shares moved higher in after hours trading.
But its suppliers have not followed suit, hit by a spate of profit taking. Arm is down 14p at £11.76 and Imagination Technologies had dipped 1p to 204.2p. But Laird is an exception, up 1.9p to 356.8p.
Liberum analysts repeated their recommendations on the businesses: a buy for Imagination, sell for Arm and hold for Laird. They said:
The key metric for suppliers is combined volume. iPhone plus iPad units of 73.8m were up 18% year on year. Apple’s share price was up modestly after market. Don’t expect much movement in the share prices of suppliers. Apple exposure in order: Imagination – around 35% of revenue, Laird around 20%, ARM less than 10%, Infineon less than 5%.
On Imagination, we model a 39m half on half increase in Imagination’s graphics royalty units in the second half of 2015 while Apple’s volume over the same period increased by 64m. There could be upside to Imagination’s royalty revenue estimates but questions remain over licensing in the second half of 2015.
