Cirrus Logic Inc.
) reported first quarter 2013 adjusted earnings of 16 cents per
share, which was in line with the Zacks Consensus Estimate. 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 dropped 24.7% from the
APPLE INC (AAPL): Free Stock Analysis Report
CIRRUS LOGIC (CRUS): Free Stock Analysis Report
MAXIM INTG PDTS (MXIM): Free Stock Analysis
ON SEMICON CORP (ONNN): Free Stock Analysis
STMICROELECTRON (STM): Free Stock Analysis
TEXAS INSTRS (TXN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Despite the miss, the company's shares leaped 23%, reflecting
positive investor sentiment on the back of strong revenue guidance.
Total revenue for the first quarter was $99.0 million, up 7.3% on a
year-over-year basis. This was slightly below the Zacks Consensus
Estimate of $101.0 million, affected by lower sales of
) iPhone, iMac and iPod. Apple happens to be Cirrus' prime
customer, with 62.0% share of 2012 revenues.
Segment-wise, Audio Product revenue increased 13.5% year over year
to $80.7 million, while Energy product revenue came in at $18.3
million, down 13.6% year over year.
Reported gross margin in the quarter was 54.0%, up from 51.7% in
the year-ago quarter.
Operating margin was 10.6% versus 15.5% in the year-ago quarter.
The company's total operating expenses increased 28.8% on a
year-over-year basis. Higher operating expenses were mainly due to
32.7% and 23.6% 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 $6.9 million or 10 cents per diluted
share compared with $9.2 million or 13 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 first quarter was $10.6 million or 16 cents per diluted
share compared with $14.5 million or 21 cents in the year-ago
Cash and short-term investments were $166.7 million versus $181.9
million in the previous quarter. The company has no long-term debt.
Management has provided an upbeat outlook for the second quarter.
Revenue is expected to be $170.0-$190.0 million, with gross margin
in the 52-54% range and total operating expenses of between $49
million and $53 million.
Cirrus affirmed that its new products would hit the market very
soon, increasing consumer acceptance and boosting its sales. As a
part of that effort, the company is heavily investing in R&D,
which it believes will soon start paying off.
Based on the new launches, higher sales of mobile devices and SSDs
(solid state drives) and wins at Apple, Cirrus forecasts solid
growth for the rest of fiscal 2013.
The Zacks Consensus Estimates for second quarter and fiscal 2013
are pegged at 34 cents and $1.48 per share, respectively.
Cirrus posted a weak first quarter with the bottom line matching
the Zacks Consensus Estimate and the top line missing the same.
Revenues could be better but lower iPhone sales took a toll on the
company. But Cirrus provided an upbeat second quarter guidance,
which was enough to encourage investors.
We are also positive about the strong demand for its analog and
mixed-signal integrated circuits for audio products.
However, keeping in view Apple's weak third quarter results
(announced last week) and uncertainty regarding the ramp of iPhone
5, we believe that the guidance is a bit aggressive.
Overdependence on Apple and stiff competition from the likes of
Texas Instruments Inc.
Maxim Integrated Products
) leads to a Zacks #4 Rank, implying a short-term Sell rating.