Morgan Stanley Comments On ARM's Q2 Miss

Following last week's earnings miss by ARM (NASDAQ: ARMH), Morgan Stanley analyst Francois Meunier performed a more in-depth analysis of China's smartphone slowdown.

Earlier Tuesday, Meunier issued a note explaining the implications of his analysis.

Meunier said the smartphone slowdown in China explains one-third, or $3 million, of ARM's revenue shortfall while the other two-thirds, or $5-7 million, resulted from a decline in feature phones. He further stated that it is unlikely ARM will recover from the decline in feature phones due to Microsoft's closure of Nokia's feature phone business.

Amid the note, shares of ARM were trading down about one percent to $42.73.