Cirrus Logic Inc.
) reported first-quarter 2014 adjusted earnings of 47 cents per
share, surpassing the Zacks Consensus Estimate of 39 cents.
Total revenue for the first quarter of 2014 soared 56.7% from
the year-ago quarter, while revenue tumble by 25.0% to $155.1
million. Cirrus mainly benefited from its core engineering
competencies in its present market and came up with innovative
solutions. The company has witnessed significant expansion in the
custom and general market product portfolios, which include the
portable audio and LED lighting.
The company witnessed strong customer interest in the products
which enhance the audio and voice experience for mobile phones.
As per revenue segments, Audio Product revenues surged 77.9% year
over year to $143.7 million, while Energy product revenues came
in at $11.5 million, down 37.2% year over year.
Reported gross margin in the quarter was 51.2% versus 54.0% in
the year-ago quarter as a result of higher costs. Gross margin
declined as the company was unable to control its cost of
Operating margin was 20.3% versus 10.6% in the year-ago
quarter. The company's total operating expenses increased 11.7%
on a year-over-year basis. Higher operating expenses were mainly
due to 14.5% and 6.3% year-over-year increases in selling,
general and administrative (SG&A) expenses, and research and
development (R&D), respectively.
Net income on a GAAP basis was $20.6 million or 31 cents per
share compared with $6.9 million or 10 cents in the year-ago
Excluding the amortization of acquisition-related intangible
assets but including stock-based compensation expense, non-GAAP
net income for the fourth quarter was $31.1 million or 47 cents
for the quarter compared with $5.0 million or 7 cents in the
Cash and short-term investments were $67.2 million versus
$66.4 million in the previous quarter. The company has no
For the second quarter of fiscal 2014, the company expects
revenues in the range of $170 million to $190 million. Apart from
this, gross margin is expected between 46.0% and 48.0%, while the
combined R&D and SG&A expenses are expected to range
between $49.0 million and $53.0 million.
Cirrus posted decent first quarter results, with the bottom
line comprehensively beating the Zacks Consensus Estimate.
Although revenues were good for the quarter, gross margin took a
hit due to higher cost, as the company could not control
We remain cautious about the company as the current global
economic downturn might affect its business potential, going
forward. Although the company increased its revenue guidance, it
would be difficult for the company to achieve it given the
current business condition. Moreover, the company is faced with
stiff competition from the likes of
Texas Instruments Inc.
) are also causes of concern.
The company carries a Zacks Rank #5 (Strong Sell).
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