• Thu 55°F / 37°F

Apple Trades Below $400 a Share

Feng Li/Getty Images(NEW YORK) -- Shares of Apple (NASDAQ: AAPL) plunged to a 52-week low on Wednesday, dipping below $400 a share, after one of its key suppliers issued a disappointing forecast.

Apple's latest 52-week low is $398.11, reached mid-day. The stock fell $25 to $400.29 a share later in the afternoon, down about 6 percent. The company's previous 52-week low was around $411.

Late Tuesday, Cirrus Logic, which makes parts for the iPhone and iPad and is based in Austin, Texas, said it expected a decrease in gross margin of more than 10 percent to approximately 40.4 percent. That's below the firm's previous guidance of 50 to 52 percent. Gross margin is difference between revenue and costs.

In a statement, the company said this was "due to a decreased forecast for a high-volume product as the customer migrates to one of Cirrus Logic's newer components."

A large majority of Cirrus' sales come from Apple, according to Brian Colello, Morningstar analyst.

"They are massively leveraged to Apple," Colello said.

Colello said it is very likely the company is writing off inventory for parts for the iPhone 5, which was released last September, amid "lower the anticipated demand for the product."

He added there's a chance that Apple uses the newer part for the next generation of the iPhone.

"But it shows iPhone 5 demand has not been as strong as previously anticipated," he said. "The question is did we know that already?"

Apple had previously forecast weaker revenue forecast, which is largely driven by iPhone sales.

"So certainly it's negative news for CRUS and Apple, but it could mean a summer iPhone 5S launch or the next generation," Colello said.

Apple shares, once the darling of Wall Street, have fallen more than 40 percent since topping out at $750 last October.

Copyright 2013 ABC News Radio

Advertise With Us

Would you like to advertise on East Idaho News? Fill out this form to contact a representative.
  • Full and Last
  • The name of your company, business or brand.