Cirrus Logic (CRUS) Q1 Earnings & Revenues Beat, Down Y/Y

Cirrus Logic Inc.CRUS reported better-than-expected top line and bottom-line results for the first quarter of fiscal 2019, surpassing the Zacks Consensus Estimate.

The company's non-GAAP earnings per share of 28 cents topped the Zacks Consensus Estimate of 6 cents. However, the figure declined 65.4% year over year due to lower revenues and higher operating expenses.

Total revenues of $254.5 million surpassed the Zacks Consensus Estimate of $231 million. However, the figure was down 20.7% year over year.

Nonetheless, a higher-than-expected demand for portable audio combined with growing momentum of demand for features for enhanced user experience, across the company's target markets, including flagship and mid-tier smartphones, advanced mobile accessories and in-home connected devices remained positive.

Cirrus Logic, Inc. Price, Consensus and EPS Surprise

Cirrus Logic, Inc. Price, Consensus and EPS Surprise | Cirrus Logic, Inc. Quote

Quarter Details

Segment wise, portable audio product revenues (83.4% of the total revenues) came in at $212.3 million, down 24.4% year over year. However, non-portable audio and other products (16.6%) increased 5.5% to $42.2 million.

Non-GAAP gross profit was $124.8 million, which decreased 23% on a year-over-year basis. Gross margin contracted 150 basis points (bps) to 49%.

Cirrus Logic's non-GAAP operating expenses increased 9.5% on a year-over-year basis to $104.9 million.

Non-GAAP operating income of $19.9 million declined 70%. Moreover, non-GAAP operating margin contracted 1290 bps from the year-ago quarter to 7.8%.

On a non-GAAP basis, Cirrus Logic reported net income of $17.9 million compared with $54.6 million reported in the year-ago quarter. This marked a decline of 67.2%.

The company exited the quarter with cash and cash equivalents of $186.5 million compared with $235.6 million at the end of the previous quarter. Accounts receivables were $126.6 million compared with $100.8 million last quarter. Notably, it did not have any long-term debt during the quarter.


Cirrus Logic provided guidance for second-quarter fiscal 2019.

The company expects revenues between $310 million and $350 million. GAAP gross margin is projected in the range of 48-50%.

The company is optimistic about its diverse product portfolio, and expects to return to growth in fiscal 2020.

Zacks Rank and Stocks to Consider

Currently, Cirrus Logic carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Adobe ADBE and SCIENCE APPLICATIONS INTERNATIONAL CORPORATION SAIC , each sporting a Zacks Rank #1 (Strong Buy), and Momo Inc. MOMO , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Long-term earnings growth for Adobe, SCIENCE APPLICATIONS INTERNATIONAL and Momo is projected to be 16.20%, 22% and 5%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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