Wednesday, 28 January 2015

Shares in Apple suppliers leap on record results


The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014. Picture taken June 26. REUTERS/Yuya Shino
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014. Picture taken June 26.
Credit: Reuters/Yuya Shino
(Reuters) - Shares in European companies that supply parts to Apple Inc (AAPL.O) leapt on Wednesday after the tech giant reported the largest profit in corporate history, driven by record sales of iPhones and strong demand in China.
Shares in British chip designer ARM (ARM.L) and Imagination Technologies (IMG.L), which supplies graphics processing to the U.S. group, rose between 3 and 4 percent at the open as investors cheered the news overnight.
With ARM having the highest price to earnings valuation amongst its peers, traders said investors should look to buy into the stock on one of the days when it slips.
"You have to be a buyer of ARM on the dip. It not only provides Apple with
chips but also Samsung, and they get all the royalties," said Beaufort Securities sales trader Basil Petrides.
German chipmaker Dialog Semiconductor (DLGS.DE), which counts Apple as one of its customers, rose 1.5 percent by 0819 GMT.
Dialog makes chips that manage power consumption of consumer electronics such as smartphones and tablet computers. Apple and Samsung Electronics (005930.KS) are among its main customers and its shares are up almost a fifth this year.
Apple smashed its quarterly forecasts, selling 74.5 million iPhones in its fiscal first quarter ended Dec. 27, compared with a forecast of fewer than 70 million. Revenue rose to $74.6 billion from $57.6 billion a year earlier.
Profit of $18 billion was the biggest ever reported by a public company, worldwide, according to S&P analyst Howard Silverblatt.

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