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What to Expect From Cirrus Logic (CRUS) in Q4 Earnings?

Cirrus Logic, Inc.CRUS is slated to release fourth-quarter fiscal 2018 results on May 2. Notably, the company beat estimates in three of the trailing four quarters, delivering an average positive earnings surprise of 12.07%. However, in the last reported quarter, the company delivered a negative earnings surprise of 10.17% due to a sudden fall in demand for smartphones in the later part of December 2017.

The Zacks Consensus Estimate for the fourth quarter is pegged at 59 cents per share, indicating 30.6% decline on a year-over-year basis. Revenues are estimated to be around $316.28 million, with a 3.5% decrease from the year-ago quarter.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Cirrus Logic has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

What's Behind the Tepid Expectations?

Overdependence on Apple for revenue generation continues to be a major headwind for the company. The company generates more than 75% of its revenues by selling audio chips, which are used in iPhone devices.

Apple reported dismal iPhone unit sales for the first quarter of fiscal 2018, primarily due to lower-than-expected holiday season sales of its premium device iPhone X. Owing to this, in January 2018, Apple slashed its production target to around 40 million, per Nikkei.

Of late, analyst firms have also brought down iPhone sales expectations. Goldman Sachs' has trimmed iPhone sales expectations by 1.7 million units to 53 million for the March quarter. We believe that lower production of iPhone units will adversely impact near-term results of Cirrus Logic.

Cirrus Logic, Inc. Price and EPS Surprise

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

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Seagate Technology PLC STX has an Earnings ESP of +3.43% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Arrow Electronics, Inc. ARW has an Earnings ESP of +0.66% and a Zacks Rank #2.

FireEye, Inc. FEYE has an Earnings ESP of +6.67% and a Zacks Rank #3.

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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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