Technology companies fall back after disappointing sales forecasts from US giant
Shares have regained some poise after the two day sell-off on emerging market concerns, but two UK technology favourites are in the doldrums.
Following *Apple*'s disappointing outlook overnight, with a revenue forecast below expectations, *Arm* and* Imagination Technologies* - whose technologies are used in the US company's iPads and iPhones - have both seen their shares hit. Arm is down 24p at 933.5p while Imagination is off 2.6p at 176p.
The news from across the Atlantic was an opportunity for Liberum Capital to repeat its sell rating on Arm. Analyst Janardan Menon said:
Apple shares were sharply down following weaker than expected iPhone shipments in its December quarter and weaker than expected revenue guidance for its second quarter ending March.
Apple sold 51m iPhones in the quarter, below street expectations in the region of 54m to 56m. The company blamed supply constraints as well as shifting carrier upgrade practices for the shortfall. Along with Samsung's weak fourth quarter smartphone sales and first quarter guidance, these figures further highlight the on going slowdown in the smartphone market, particularly at the high-end.
Smartphones account for the majority of Arm's royalty revenue and the slower sales in this segment is expected to reduce Arm's royalties below current market expectations. We regard the stock as being over-valued and reiterate our sell recommendation.
Overall though the *FTSE 100* has added 19.91 points to 6570.57, ahead of UK GDP figures and as some of the recent emerging market fears receded a little. Ishaq Siddiqi, market strategist at ETX Capital, said:
The global deterioration of equity markets paused overnight in Asian markets, a day after stocks in the region fell to six-month lows. Slowing growth in China together with the US Federal Reserve's tapering of QE prompted fresh fears about the outlook for emerging markets. Last week's slide in the Argentinean peso after the central bank there halted policies to support the currency together with run on the Turkish Lira [a rate hike expected in coming days from the central bank there] and on political instable nations like Ukraine and Thailand, all added to rattle investor sentiment around the EM space.
The modest recovery in Asian markets helped kick European share markets higher this morning but investors mostly avoided taking big bets before the [latest] Federal Reserve policy meeting that is scheduled to commence today with an outcome expected tomorrow.
Positive news from *Amec*, up 13p at £10.33 on news of a $974m consortium contract win from BP, helped the mood, while *Royal Bank of Scotland *has edged up 6.5p to 338.7p after Monday's shock warning. Reported by guardian.co.uk 15 hours ago.
Shares have regained some poise after the two day sell-off on emerging market concerns, but two UK technology favourites are in the doldrums.
Following *Apple*'s disappointing outlook overnight, with a revenue forecast below expectations, *Arm* and* Imagination Technologies* - whose technologies are used in the US company's iPads and iPhones - have both seen their shares hit. Arm is down 24p at 933.5p while Imagination is off 2.6p at 176p.
The news from across the Atlantic was an opportunity for Liberum Capital to repeat its sell rating on Arm. Analyst Janardan Menon said:
Apple shares were sharply down following weaker than expected iPhone shipments in its December quarter and weaker than expected revenue guidance for its second quarter ending March.
Apple sold 51m iPhones in the quarter, below street expectations in the region of 54m to 56m. The company blamed supply constraints as well as shifting carrier upgrade practices for the shortfall. Along with Samsung's weak fourth quarter smartphone sales and first quarter guidance, these figures further highlight the on going slowdown in the smartphone market, particularly at the high-end.
Smartphones account for the majority of Arm's royalty revenue and the slower sales in this segment is expected to reduce Arm's royalties below current market expectations. We regard the stock as being over-valued and reiterate our sell recommendation.
Overall though the *FTSE 100* has added 19.91 points to 6570.57, ahead of UK GDP figures and as some of the recent emerging market fears receded a little. Ishaq Siddiqi, market strategist at ETX Capital, said:
The global deterioration of equity markets paused overnight in Asian markets, a day after stocks in the region fell to six-month lows. Slowing growth in China together with the US Federal Reserve's tapering of QE prompted fresh fears about the outlook for emerging markets. Last week's slide in the Argentinean peso after the central bank there halted policies to support the currency together with run on the Turkish Lira [a rate hike expected in coming days from the central bank there] and on political instable nations like Ukraine and Thailand, all added to rattle investor sentiment around the EM space.
The modest recovery in Asian markets helped kick European share markets higher this morning but investors mostly avoided taking big bets before the [latest] Federal Reserve policy meeting that is scheduled to commence today with an outcome expected tomorrow.
Positive news from *Amec*, up 13p at £10.33 on news of a $974m consortium contract win from BP, helped the mood, while *Royal Bank of Scotland *has edged up 6.5p to 338.7p after Monday's shock warning. Reported by guardian.co.uk 15 hours ago.