A while ago, Nikkei.com came out with a report that yet again says that Apple is going to be continuing its production cuts for the current (Apple FQ3) as well per their sources among parts suppliers.
The article says that slow sales of the iPhone 6s and 6s Plus has forced Apple to adjust inventories. The article goes on to say that the company reduced production for the March quarter by 30% and will maintain that reduced level for the current (June quarter as well).
Nikkei says that Apple does not plan to produce a large enough volume of the iPhone SE to offset the slump in the iPhone 6s and 6s Plus.
The article goes on to say that should Apple decide to release its next "flagship model" (I am assuming they are referring to the iPhone 7) earlier than September, "parts production could take off around late May."
Shares off Apple have slumped about 2% in response and are currently trading at $110 per share.
Nikkei had an exact same article on January 5 (would be Jan 6 in Japan) that stated the exact same thing about 30% production cuts and that day the effect on Apple shares was the exact same as well, closing down 2.5% at around $103.
Four thoughts jump to my mind:
Is Apple itself leaking this stuff in some pathetic attempt to have weak sales and guidance baked in by the time they report earnings in less than a week and a half? As most of you know, I am not a fan of Tim Cook and his stewardship thus far at Apple. Talking Tim Cook, he does seem a very busy man of late attending Hollywood junkets, basketball games and movie Awards ceremonies.
Secondly, until the ship turns around at Apple, these stories will continue unabated especially since it's so easy to knock the stock down given the incessant noise and doomsday scenarios painted by the gurus and swamis wherever you look. Of course, the massive global economic uncertainty and the awkward and asinine (at best) stance of our Fed heads is also going a long way in the tremendous volatility we are seeing in our markets at the moment.
Thirdly, the timing of the Nikkei article was very suspicious indeed. Just two hours before OpEx on a Friday afternoon and at 2 am in Japan? Seriously? (Makes me go hmmm!)
Finally, I wonder what Simona Jankowski, the uber-bullish analyst at Goldman Sachs will say about this next week? Will she address it at all?
I have cashed in on my short sales of the weekly calls expiring at the close today and rinsed and repeated the same action for calls expiring next week.
More than likely the negativity and production cuts stories, articles and reports could reach fever pitch next week just ahead of Apple's earnings the following week.
(Long aapl, calls, short weeklies expiring next Friday)
