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Why Is Cirrus Logic (CRUS) Up 2.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Cirrus Logic (CRUS - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cirrus Logic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cirrus Logic delivered better-than-anticipated third-quarter fiscal 2022 results, with the top and the bottom line surpassing the Zacks Consensus Estimate as well as increasing year over year.
The company reported adjusted earnings of $2.54 per share beating the Zacks Consensus Estimate by 18.1%. The bottom line rose 19% from the prior-year quarter’s reported figure of $2.13.
Top-Line Details
Total revenues of $548.3 million surpassed the Zacks Consensus Estimate by 7.3% and increased 12.9% year over year.
During the fiscal third quarter, the top line was driven by increasing demand for high-performance mixed-signal content shipping for smartphones as well as higher demand for fast-charging ICs in smartphones and audio products in laptops. Cirrus Logic ramped up shipments of boosted amplifiers and haptic drivers ahead of upcoming product launches.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help achieve sustainable growth over the next year. As part of its strategic initiatives, the company is consistently focused on strengthening presence among its Android customers and ramping up shipments for the leading laptop original equipment manufacturers (“OEMs”).
The Texas-based company rearranged its reportable segments and created a separate category during fourth-quarter fiscal 2021, namely High-Performance Mixed-Signal and Audio.
Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products and contributed 37.6% to total revenues in the fiscal third quarter. Revenues from the same division surged 98.7% year over year to $206.5 million on solid strong demand for its camera controllers, haptics & sensing and recently acquired fast-charging solutions. During the first nine months of fiscal 2022, the segment contributed 33% to total revenues.
The Audio segment sales declined 10.5% to $341.9 million and made up 62.4% of the total revenues.
Margins
Non-GAAP gross profit of $289.8 million climbed 15.1% on a year-over-year basis. Non-GAAP gross margin expanded 100 basis points (bps) to 52.8%. Cirrus Logic’s non-GAAP operating expenses rose 9.2% year over year to $115.5 million.
Non-GAAP operating income of $174.2 million increased 19.4% year over year. Moreover, non-GAAP operating margin expanded 180 bps to 31.8%.
Balance Sheet and Cash Flow
The company exited the fiscal third quarter with cash and marketable securities of $198.8 million compared with the $394.9 million seen at the end of the previous quarter.
Accounts receivables were $326.1 million compared with $281 million recorded in the prior quarter.
During the fiscal third quarter, the company reported $135.9 million as cash used from operations.
The company repurchased 500,783 shares worth $40 million in the quarter under review. As of Dec 25, 2021, the company has $267.5 million worth of shares remaining under its existing share repurchase authorization.
Outlook
For fourth-quarter fiscal 2022, the company projects revenues between $400 million and $440 million. At the mid-point, the guidance suggests growth of approximately 43% year over year.
Gross margin is expected in the range of 51-53%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 100.46% due to these changes.
VGM Scores
At this time, Cirrus Logic has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cirrus Logic has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Cirrus Logic (CRUS) Up 2.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Cirrus Logic (CRUS - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cirrus Logic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cirrus Logic’s Q3 Earnings & Revenues Beat Estimates
Cirrus Logic delivered better-than-anticipated third-quarter fiscal 2022 results, with the top and the bottom line surpassing the Zacks Consensus Estimate as well as increasing year over year.
The company reported adjusted earnings of $2.54 per share beating the Zacks Consensus Estimate by 18.1%. The bottom line rose 19% from the prior-year quarter’s reported figure of $2.13.
Top-Line Details
Total revenues of $548.3 million surpassed the Zacks Consensus Estimate by 7.3% and increased 12.9% year over year.
During the fiscal third quarter, the top line was driven by increasing demand for high-performance mixed-signal content shipping for smartphones as well as higher demand for fast-charging ICs in smartphones and audio products in laptops. Cirrus Logic ramped up shipments of boosted amplifiers and haptic drivers ahead of upcoming product launches.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help achieve sustainable growth over the next year. As part of its strategic initiatives, the company is consistently focused on strengthening presence among its Android customers and ramping up shipments for the leading laptop original equipment manufacturers (“OEMs”).
The Texas-based company rearranged its reportable segments and created a separate category during fourth-quarter fiscal 2021, namely High-Performance Mixed-Signal and Audio.
Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products and contributed 37.6% to total revenues in the fiscal third quarter. Revenues from the same division surged 98.7% year over year to $206.5 million on solid strong demand for its camera controllers, haptics & sensing and recently acquired fast-charging solutions. During the first nine months of fiscal 2022, the segment contributed 33% to total revenues.
The Audio segment sales declined 10.5% to $341.9 million and made up 62.4% of the total revenues.
Margins
Non-GAAP gross profit of $289.8 million climbed 15.1% on a year-over-year basis. Non-GAAP gross margin expanded 100 basis points (bps) to 52.8%.
Cirrus Logic’s non-GAAP operating expenses rose 9.2% year over year to $115.5 million.
Non-GAAP operating income of $174.2 million increased 19.4% year over year. Moreover, non-GAAP operating margin expanded 180 bps to 31.8%.
Balance Sheet and Cash Flow
The company exited the fiscal third quarter with cash and marketable securities of $198.8 million compared with the $394.9 million seen at the end of the previous quarter.
Accounts receivables were $326.1 million compared with $281 million recorded in the prior quarter.
During the fiscal third quarter, the company reported $135.9 million as cash used from operations.
The company repurchased 500,783 shares worth $40 million in the quarter under review. As of Dec 25, 2021, the company has $267.5 million worth of shares remaining under its existing share repurchase authorization.
Outlook
For fourth-quarter fiscal 2022, the company projects revenues between $400 million and $440 million. At the mid-point, the guidance suggests growth of approximately 43% year over year.
Gross margin is expected in the range of 51-53%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 100.46% due to these changes.
VGM Scores
At this time, Cirrus Logic has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cirrus Logic has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.