Largan leads rise in ‘Apple concept stocks’ on Apple earnings

Taipei, Largan Precision Co., which supplies smartphone camera lenses to Apple Inc., led many Apple suppliers to move higher Wednesday after the U.S. tech giant reported better than expected earnings for the January-March period, dealers said.

Apple's key chip supplier Taiwan Semiconductor Manufacturing Co. (TSMC) remained in the doldrums, however, keeping the broader market in consolidation mode, they said.

As of 10:44 a.m., shares of Largan had gained 6.75 percent to NT$3,715.00 (US$125), with 1,060,000 shares changing hands on the Taiwan Stock Exchange, where the weighted index was little changed at 10,658.26.

Led by Largan, Catcher Technology Co., a metal casing maker, had risen 1.36 percent to NT$335.50, and Genius Electronic Optical Co. had added 0.85 percent to NT$355.00.

TSMC, the most heavily weighted stock in the local market, was down 0.88 percent at NT$225.00.

"Apple concept stocks generally moved higher on follow-through buying from the previous session after the U.S. firm's earnings beat a market estimate," Hua Nan Securities analyst Kevin Su said.

Apple reported earnings per share of US$2.73 for the three-month period, compared with market expectations of US$2.67, and revenue of US$61.1 billion, beating an earlier market estimate of US$60.82 billion.

The better than expected earnings and revenue came even though iPhone sales of 52.2 million units during the January-March period fell just short of market expectations of 52.54 million units.

The U.S. firm reported its earnings after U.S. markets closed Tuesday, when its share price closed up 2.30 percent, helping the Dow Jones Industrial Average recoup most of its earlier losses.

"The lower than expected iPhone sales had been factored into the share prices of many Apple concept stocks here. So investors set their sights on the earnings for the last quarter and sales guidance for the current quarter," Su said.

"In addition, Apple's software services and wearable devices performed well last quarter to boost its earnings."

Apple said its revenue for the current quarter is expected to range between US$51.5 billion and US$53.5 billion, higher than an earlier market estimate of US$51.61 billion.

"Despite the upturn today, I think the gains posted by many Apple concept stocks in Taiwan are technical in nature, rebounding from recent heavy losses caused by worries over iPhone sales," Su said.

Su said that whether these Apple suppliers begin trending upward and posting further gains will depend on their real sales numbers down the road.

Source: Focus Taiwan News Channel