Cirrus Logic Inc.
) reported third quarter 2013 adjusted earnings of $1.55 per
share, surpassing the Zacks Consensus Estimate of $1.34. Adjusted
or non-GAAP earnings per share exclude amortization of
acquisition-related intangible assets, but include stock-based
Total revenue for the third quarter soared 153.4% from the
year-ago quarter to $310.1 million, boosted by higher sales of
) iPhone 5, which generated good demand for the company's
products. Apple takes parts from Cirrus logic to manufacture its
audio products. That's a healthy part of the company's business,
and overall we see a big opportunity to continue to increase the
company's audio revenue.
Segment wise, Audio Product revenue surged 184.6% year over
year to $300.0 million while Energy product revenue came in at
$10.1 million, down 40.3% year over year.
Reported gross margin in the quarter was 51.0% versus 54.0% in
the year-ago quarter as a result of higher costs.
Operating margin was 34.2% versus 21.6% in the year-ago
quarter. The company's total operating expenses increased 96.7%
on a year-over-year basis. Higher operating expenses were mainly
due to 27.9% and 15.4% 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 $67.9 million or 99 cents per
diluted share compared with $16.7 million or 25 cents in the
Excluding the amortization of acquisition-related intangible
assets but including stock-based compensation expense, non-GAAP
net income for the third quarter was $1.55 per diluted share
compared with 39 cents in the year-ago quarter.
Cash and short-term investments were $87.5 million versus
$67.8 million in the previous quarter. The company has no
Management has provided upbeat outlook for the fourth quarter.
The company expects revenues to be between $200.0 million and
$220.0 million. Gross margin is expected to be between 50.0% and
52.0%. Combined R&D and SG&A expenses are expected in the
range of $49 million to $51 million.
Cirrus posted a stellar third quarter, with the bottom line
comprehensively beating the Zacks Consensus Estimate. Expecting
the momentum to persist, Cirrus provided decent fourth quarter
guidance, which was enough to encourage the investors.
We remain optimistic 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, good support from Apple Inc will help the company
in the long run.
The company has a Zacks Rank #3 (Hold).
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