Apple’s supply chain saw sales dip below historical trends in April, according to Ticonderoga Securities analyst Brian White. The analyst said that companies that derive “a significant portion of their revenues from Apple” saw their sales decline 7.5% month-over-month, well below the six year average of a 0.4% increase.
The data comes from an “Apple Barometer” that monitors such companies maintained by Ticonderoga. By watching the companies in the Apple Barometer, Mr. White tries to derive sales trends that reflect Apple’s own sales.
In a research note to clients obtained by The Mac Observer, the analyst wrote, “We believe that a broad basket of suppliers with a high concentration of sales generated from Apple represents a more reliable indicator of sales trends at the company compared to merely tracking revenue trends of a single major EMS provider like Hon Hai Precision, which generates an estimated 75% of its sales from customers other than Apple.”
Apple’s Supply Chain
The analyst explained that March is typically the strongest month of the year for Apple’s supply chain. In comparison, April then usually represents a “muted” month for those suppliers. As mentioned above, the six year average for April is for the supply chain is to see a 0.4% increase in sales, compared to a 24% month-over-month increase during March. In 2010, April saw a 4.4% month-over-month increase for these companies.
Mr. White had a couple of caveats for keeping this information in perspective. The first is that Apple guided for lower sequential revenues in the June quarter (Apple’s March quarter revenues and profit were the highest in the company’s history). Apple told analysts to expect a 7% sequential decline for the current quarter.
He also noted that the Apple Barometer is still crushing year-over-year sales. April’s year-over-year sales were up 113%, “the highest across our Taiwan Tech Barometers,” but below the 141% year-over-year comparison for March.
Mr. White maintained his “Buy” rating on AAPL and his $612 12-month price target for the stock, the most Bullish of any analyst we’ve seen.
Shares in Apple traded lower in the mid-morning trading session, at US$348.549, down $0.901 (-0.26%).
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.