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Supply issues related to the iPhone 5 are taking its toll on Apple’s (NASDAQ:AAPL) stock price, and now UBS analyst Steve Milunovich has also cut his forecast for the company’s upcoming first quarter and the next fiscal year. The analyst now expects revenues of $49.3 billion and earnings of $13.65 per share, down from $53.1 billion and $15.03, respectively. He also cut his full year earnings per share forecast to $52.51 from $53.76, falling below the Wall Street consensus figure of $53.32.
Milunovich said he was worried low manufacturing yields for the new in-cell displays being used by Apple in the new phone would continue to limit near-term shipments. He cited weak financial forecasts from Skyworks and Jabil and his own checks with the supply chain, and also cut iPhone unit sales for the December-ending quarter to 38 million from a previous forecast of 44 million. “This shortfall mostly appears to be a timing issue though we assume some lost sales in an effort to be conservative,” Milunovich wrote in a research note to investors on Thursday.
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However, the analyst chose to stick with his September quarter iPhone sales estimate at 26 million, with 8 million to 10 million iPhone 5 unit sales. He also kept his previous forecast of 44 million unit sales in the March quarter, 43 million in the June quarter, and 38 million in the September 2013 quarter for a total of 163 million for the fiscal year.
Milunovich is also keeping his Buy rating on the shares. “We do not read the maps glitch and potential near-term shipment disappointment as a material change in the long-term story,” he wrote. “In our view, stock gains may not come as easily, but there are few tech franchises with Apple’s return on invested capital and growth at 11x enterprise value/free cast flow.”
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