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Supplier performance seen pointing to strong Apple Q1

updated 10:35 am EST, Thu January 12, 2012

Multi-Fineline Electronix posts high Dec. sales

The performance of Apple suppliers is pointing toward a strong December quarter for the company, analysts indicate. UBS analyst Maynard Um uses the example of Multi-Fineline Electronix, which helps supply flexible printed circuit boards for products like the iPhone and iPad. MFE has posted preliminary net sales of $239 million for the quarter, exceeding a $215 million consensus forecast.

The firm's CEO, Reza Meshgin, attributes the figure to a supply chain gradually recovering from flooding in Thailand, and also "an increase in shipments to our largest key customer." Um argues that the customer is Apple, noting that MFE had weak performance in the September quarter, the same period during which Apple experienced a sequential decline in iPhone sales. Apple is predicted to account for 66 percent of MFE's net sales in the March quarter.

MFE itself has stated that it anticipates "less of a seasonal decline" than usual in the current quarter because of demand for flex assemblies intended for smartphones and tablets. Um takes this as a likely sign of "underlying demand strength" for iPhones and iPads. Other Apple suppliers said to have done well in the December quarter include Catcher, TPK, and Hon Hai (a.k.a. Foxconn), which handle Mac casings, iPad 2 touchpanels, and general assembly, respectively. Hon Hai's December sales hit approximately $10.6 billion, a rise of 3.2 percent month-over-month.

Ticonderoga Securities analyst Brian White comments that a self-created index of Apple suppliers, nicknamed the "Apple Barometer," was up 9 percent in December. He in fact suggests that the barometer might lowball Apple's performance, as the suppliers' non-Apple business may have slipped.

Apple is scheduled to announce its December quarter results on January 24th.

by MacNN Staff



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