What happened

Shares of II-VI (NASDAQ:IIVI), a provider of optoelectronic components and engineered materials, were down 12.9% at 3:30 p.m. EST on Monday. There was no company-specific news, but a guidance cut from Apple supplier Lumentum (NASDAQ:LITE) and negative analyst commentary around iPhone shipments led investors to sell off the stock.

So what

Lumentum generates 30% of its annual revenue from Apple, so its bleak guidance cut on Monday gave investors some information on expected iPhone shipments. Lumentum now expects to produce second-quarter revenue between $335 million and $355 million, down from a previous range of $405 million to $430 million. The company also slashed its earnings-per-share guidance range to $1.15 to $1.34, down from a range of $1.60 to $1.75.

The iPhone XS.

The iPhone XS. Image source: Apple.

Lumentum said the guidance cut was caused when a large customer scaled back orders. "We recently received a request, from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing, to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," Lumentum said.

In addition to the Lumentum news, a few analysts sounded the alarm about Apple's iPhone shipments. Longbow Research expects iPhone order cuts between 20% and 30%, and JPMorgan sees iPhone order cuts and margin headwinds. And on Monday, analyst Ming-Chi Kuo also cut his iPhone XR shipment estimate through September 2019 to 70 million from 100 million. Kuo blamed the U.S.-China trade war, competition in emerging markets, and a lack of certain features on the cheapest new iPhone for the estimate cut.

Now what

II-VI got caught up in all this negativity since it's also an Apple supplier. The stock got hit hard last week when II-VI announced its acquisition of Finisar, and now this Apple-related news has only made things worse.

What ultimately matters is II-VI's own results. The company reported solid first-quarter results earlier this month, and its guidance was above analyst estimates. Investors may be throwing out the baby with the bathwater.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.