Cirrus Posts Stellar 2Q, Outlook Up - Analyst Blog
November 01 2012 - 5:30AM
Zacks
Cirrus Logic Inc.
(CRUS) 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.
Revenue
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 Apple Inc.’s (AAPL)
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.
Operating
Results
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 year-ago quarter.
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 year-ago quarter.
Balance Sheet
Cash and short-term investments
were $134.6 million versus $166.7 million in the previous quarter.
The company has no long-term debt.
Outlook
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, respectively.
Our Take
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 investors.
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. (TXN),
STMicroelectronics (STM), ON
Semiconductor (ONNN) and Maxim Integrated
Products (MXIM) are concerns, strong correlation with
Apple and better-than-expected guidance leads to a Zacks #1 Rank,
implying a short term “Strong Buy” rating.
APPLE INC (AAPL): Free Stock Analysis Report
CIRRUS LOGIC (CRUS): Free Stock Analysis Report
MAXIM INTG PDTS (MXIM): Free Stock Analysis Report
ON SEMICON CORP (ONNN): Free Stock Analysis Report
STMICROELECTRON (STM): Free Stock Analysis Report
TEXAS INSTRS (TXN): Free Stock Analysis Report
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