It was a small change for Apple but a momentous event for parts supplier Volex.
For its latest iPhone, Apple Inc.(NASDAQ:AAPL) changed the connector hitting maker of power cords for computers and mobile devices, Volex PLC(LON:VLX).
The company has been caught on the wrong foot by the change in the specifications b its largest customer.
Volex issued a profit warning attributing it to “a delay in product launches and a change in product component strategy by our largest customer." It did not name Apple however.
The company has “initiated a program of material cost reductions” and is introducing higher-margin products, it said.
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Analysts estimate that Apple accounts for about a third of its revenues.
It is not only due to Apple but also the general economic climate that is affecting the company’s prospects. Volex said that its full year profits and revenues would be below expectations.
Volex shares fell about 30 percent, its worst fall since January 2008 and were trading at 184.75 pence after it issued the profit warning.
Analysts tracking the company said that the impact of this would be a 30 percent reduction in its earnings for 2013 at 31.8 cents.
“This is the second time within recent months where Volex has been caught out by scheduling and production issues at its largest customer,” Michael O’Brien, an analyst at Canaccord Genuity, said in a note to clients. “For a business where a large part of the investment case was predicated on improving margins by closer customer engagement, greater visibility and increased value add,” the news is disappointing, he said
Some analysts lowered its price target to 240 pence from 320 pence and downgraded it to Hold from Buy.