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Apple Suppliers Lumentum, Qorvo Are Just Below Buys Before Earnings; S&P 500 Futures | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Nasdaq 100 and Dow industrials were little changed late Tuesday despite disappointing sales guidance from several top-rated tech companies, including Electronic Arts (EA). Looking ahead, Lumentum (LITE) and Qorvo (QRVO), both Apple (AAPL) suppliers, are close to buy points ahead of their earnings Wednesday as well as Apple’s results Thursday. Apple is now slightly extended while Broadcom (AVGO), Skyworks Solutions (SWKS) and iPhone X play Universal Display (OLED) are in range after clearing buy points this week.

XAutoplay: On | OffS&P 500 futures index were essentially flat vs. fair value. Nasdaq 100 and Dow futures rose 0.1%.

Along with Electronic Arts, Paycom (PAYC), FormFactor (FORM) and Check Point Software (CHKP) gave sluggish revenue outlooks, sending their shares lower in late trade. EA, Paycom and FormFactor have Composite Ratings of 97, 98 and 98, respectively out of a best-possible 99. Check Point has a solid 87.

Lumentum

Lumentum is a fiber-optic components maker. But in recent months it’s gotten more attention as a presumed supplier of 3D sensors for the Apple iPhone X.

Lumentum reports before Wednesday’s market open. Analysts predict an 8% per-share profit gain to 53 cents, with sales dipping 1% to $255 million. But Lumentum’s outlook and commentary about 3D sensor demand may be more important.

Shares reversed lower to close down 2.5% to 63.17 on Tuesday, but that’s after running up nearly 16% from Oct. 20 to Oct. 30. Lumentum has a potential buy point of 68.73.

Qorvo

The chipmaker reports after the market close Wednesday. Analysts expect a 12% EPS gain to $1.44, with revenue declining for a second straight quarter, off 6% to $811 million. Qorvo has a cup-with-handle buy point of 76.57. For a second straight session, Qorvo crossed that entry intraday, but closed below it, falling 0.6% to 75.81 on Tuesday.

Even if Lumentum and Qorvo have good results and guidance and stocks acted well, there’s still the little issue of Apple’s earnings out late Thursday. The iPhone X officially goes on sale Friday, which means there will be teardowns that reveal which Apple suppliers are winners and losers.

Other iPhone Plays

Meanwhile, Broadcom and Skyworks extended Monday’s breakouts, but are still in buy range.

Universal Display, which makes key technology for OLED screens, rose 5.7% on Tuesday to 146.50, clearing a 145.40 entry. Universal Display is not a direct Apple supplier, but the iPhone X does use an OLED screen. Samsung Electronics said Tuesday that OLED demand is strong, while initial iPhone X reviews were positive.

Universal Display reports earnings on Thursday, Skyworks is out Nov. 6, while Broadcom is several weeks away.

Apple rose 1.4% to 169.04 on Tuesday, just beyond the 5% chase zone from a 160.97 entry cleared Friday.

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