Cirrus Logic Inc.
) reported second quarter 2013 adjusted earnings of 71 cents per
share, which surpassed the Zacks Consensus Estimate of 66 cents.
The adjusted or non-GAAP earnings per share exclude amortization
of acquisition-related intangible assets, but include stock-based
compensation expense. The quarter's earnings surged 154.2% from
the year-ago level.
Total revenue for the second quarter jumped 90.7% from the
year-ago quarter to $193.8 million. This was well above the Zacks
Consensus Estimate of $180.0 million, boosted by higher sales of
) iPhone 5, which had a solid backlog in the preceding quarter.
Apple happens to be Cirrus' prime customer (for Audio products)
with 62.0% share of 2012 revenues. Ramp of new products launches
have also supported the revenue growth.
Segment wise, Audio Product revenue increased 112.6% year over
year to $177.9 million while Energy product revenue came in at
$15.9 million, down 11.5% year over year.
Reported gross margin in the quarter was 51.7%, down from
53.5% in the year-ago quarter as a result of higher costs.
Operating margin was 26.0% versus 17.6% in the year-ago
quarter. The company's total operating expenses increased 36.3%
on a year-over-year basis. Higher operating expenses were mainly
due to 49.7% and 20.5% year-over-year increases in research and
development (R&D) and selling, general and administrative
(SG&A) expenses, respectively.
Net income on a GAAP basis was $35.4 million or 51 cents per
diluted share compared with $11.2 million or 17 cents in the
Excluding the amortization of acquisition-related intangible
assets but including stock-based compensation expense, non-GAAP
net income for the second quarter was $49.3 million or 71 cents
per diluted share compared with $18.8 million or 28 cents in the
Cash and short-term investments were $134.6 million versus
$166.7 million in the previous quarter. The company has no
Management has provided an upbeat outlook for the third
quarter. Revenue is expected to be within the range of
$270.0-$300.0 million, with gross margin in the 50.0-52.0% range
and operating expenses in the range of $49.0-$52.0 million.
The Zacks Consensus Estimates for third quarter and fiscal
2013 are pegged at 89 cents and $2.37 per share,
Cirrus posted a stellar second quarter with the top and bottom
lines comprehensively beating the Zacks Consensus Estimates.
Expecting the momentum to persist, Cirrus provided an upbeat
third quarter guidance, which was enough to encourage
We are also positive about the strong demand for its analog
and mixed-signal integrated circuits for audio products.
Though stiff competition from the likes of
Texas Instruments Inc.
Maxim Integrated Products
) are concerns, strong correlation with Apple and
better-than-expected guidance leads to a Zacks #1 Rank, implying
a short term "Strong Buy" rating.
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