How Related Are ADI’s Consumer Revenues and Apple’s iPhone Sales?

Previously, ADI expected growth from the iPhone 7 to start sometime in July 2016, and it expected the dollar content of this phone to be greater than its predecessor, iPhone 6s. ADI’s fiscal 3Q16 quarter ended on July 30, 2016, and it revised its earnings guidance for the quarter at the end of July 2016.

Meanwhile, another Apple supplier, Texas Instruments (TXN), did not report growth in its Personal Electronics segment, which caters to Apple, in its fiscal 2Q16 earnings (ended June 30, 2016). We can conclude that Apple’s order for iPhone 7 components came in July 2016 and are hence reflected in ADI’s earnings, though this isn’t reflected in Texas Instruments’ earnings. However, the orders might reflect in Texas Instruments’ fiscal 3Q16 earnings (ending September 30, 2016).

Notably, the Consumer segment is a highly profitable segment for ADI. The strong sequential growth in the company’s profit margins is partly a result of 131% sequential growth in the consumer market.

You can gain exposure in ADI by investing in the VanEck Vectors Semiconductor ETF (SMH), which has holdings in 26 semiconductor stocks, including ~4.3% in ADI and ~5.0% in TXN.

Now let’s check out ADI’s Automotive segment.

View more information: https://marketrealist.com/2016/08/adis-consumer-revenue-apples-iphone-sales-co-related/

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