We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cirrus Logic Inc. (CRUS - Free Report) reported tepid top- and bottom-line results for the fourth quarter of fiscal 2018. The company’s non-GAAP earnings per share of 51 cents per share missed the Zacks Consensus Estimate of 59 cents and also declined 40% year over year. Reduced revenues and higher operating expenses were the main reason behind the dismal bottom-line results.
Quarter Details
Total revenues decreased approximately 7.5% year over year to $303.2 million mainly due to lower-than-expected smartphone unit volumes. Quarterly revenues also missed the Zacks Consensus Estimate of $326 million.
Segment wise, Portable audio product revenues (86.7% of the total revenues) came in at $262.8 million, down 9.6% year over year. However, non-portable audio and other products (13.3%) increased 8.6% year over year and came in at $40.4 million.
Non-GAAP gross profit was $153.1 million, which decreased 7% on a year-over-year basis. However, as a percentage of revenues, gross margin improved 30 basis points (bps) from the year-ago quarter to 50.5%.
Non-GAAP operating expenses increased 17.4% on a year-over-year basis to $106.8 million. As a percentage of revenues, the same increased 750 bps from the year-ago quarter to 35.2%. This in turn negatively impacted operating results.
Cirrus Logic’s non-GAAP operating income was $46.3 million, down 37.2% year over year, primarily due to higher operating expenses. Also, operating margin contracted 700 bps on a year-over-year basis and came in at 15%.
On a non-GAAP basis, Cirrus Logic reported net income of $33 million compared with $56.8 million reported in the year-ago quarter. This marked a decline of 41.8%.
The company exited the quarter with cash and cash equivalents of $235.6 million compared with $226.6 million at the end of the previous quarter. Accounts receivables were $100.8 million compared with $217.6 million in the last quarter. Notably, it did not have any long-term debt during the quarter.
Full-Year Highlights
For fiscal 2018, the company reported revenues of $1.53 billion, almost flat as compared to the year-ago level of $1.54 billion. Cirrus Logic reported non-GAAP earnings per share of $4.27 for the fiscal that declined 4.9% from the prior year.
Cirrus Logic, Inc. Price, Consensus and EPS Surprise
Cirrus Logic provided guidance for first-quarter fiscal 2019. Owing to the ongoing sluggishness in the smartphone market, the company provided a tepid outlook for the current quarter. The company expects revenues in the range of $210–$250 million (mid-point $230 million). The Zacks Consensus Estimate is pegged at $312.6 million. The company predicts GAAP gross margin to be in the range of 48-50%. Combined GAAP R&D and SG&A expenses are anticipated between $133 million and $139 million.
Bottom Line
Cirrus Logic, a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions, ended fiscal 2018 on a dismal note with reporting disappointing results for the fourth quarter. Moreover, revenue guidance for first-quarter fiscal 2019 was unimpressive.
Management expects the sluggish demand in the smartphone market to continue for sometime now, which will eventually hurt the company’s top-line. Management is a bit conservative about visibility as the markets to which Cirrus Logic caters to are maturing, thereby recording decelerating growth.
We anticipate sluggish iPhone demand to negatively impact the company’s results, with Apple (AAPL - Free Report) reportedly being one of the largest customers of the company.
Nevertheless, management remains optimistic about the company’s product portfolio, aiming a variety of smart home applications, digital headsets and smartphones. Audio amplifier design wins along with lead design win with first generation haptic products and discussions in progress with customers for second generation products are encouraging.
Moreover, it is looking to penetrate the Android market, which we believe will reduce its dependence on Apple and broaden its ability to cater to a larger customer base.
However, it seems that it will take a long time for these initiatives to practically offset the ongoing headwinds.
Zacks Rank and Stocks to Consider
Cirrus Logic currently carries a Zacks Rank #4 (Sell).
Long-term EPS growth rate for Micron and Lam Research is projected to be 10% and 17.7%, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Soft Smartphone Demand Hurts Cirrus Logic (CRUS) Q4 Earnings
Cirrus Logic Inc. (CRUS - Free Report) reported tepid top- and bottom-line results for the fourth quarter of fiscal 2018. The company’s non-GAAP earnings per share of 51 cents per share missed the Zacks Consensus Estimate of 59 cents and also declined 40% year over year. Reduced revenues and higher operating expenses were the main reason behind the dismal bottom-line results.
Quarter Details
Total revenues decreased approximately 7.5% year over year to $303.2 million mainly due to lower-than-expected smartphone unit volumes. Quarterly revenues also missed the Zacks Consensus Estimate of $326 million.
Segment wise, Portable audio product revenues (86.7% of the total revenues) came in at $262.8 million, down 9.6% year over year. However, non-portable audio and other products (13.3%) increased 8.6% year over year and came in at $40.4 million.
Non-GAAP gross profit was $153.1 million, which decreased 7% on a year-over-year basis. However, as a percentage of revenues, gross margin improved 30 basis points (bps) from the year-ago quarter to 50.5%.
Non-GAAP operating expenses increased 17.4% on a year-over-year basis to $106.8 million. As a percentage of revenues, the same increased 750 bps from the year-ago quarter to 35.2%. This in turn negatively impacted operating results.
Cirrus Logic’s non-GAAP operating income was $46.3 million, down 37.2% year over year, primarily due to higher operating expenses. Also, operating margin contracted 700 bps on a year-over-year basis and came in at 15%.
On a non-GAAP basis, Cirrus Logic reported net income of $33 million compared with $56.8 million reported in the year-ago quarter. This marked a decline of 41.8%.
The company exited the quarter with cash and cash equivalents of $235.6 million compared with $226.6 million at the end of the previous quarter. Accounts receivables were $100.8 million compared with $217.6 million in the last quarter. Notably, it did not have any long-term debt during the quarter.
Full-Year Highlights
For fiscal 2018, the company reported revenues of $1.53 billion, almost flat as compared to the year-ago level of $1.54 billion. Cirrus Logic reported non-GAAP earnings per share of $4.27 for the fiscal that declined 4.9% from the prior year.
Cirrus Logic, Inc. Price, Consensus and EPS Surprise
Cirrus Logic, Inc. Price, Consensus and EPS Surprise | Cirrus Logic, Inc. Quote
Guidance
Cirrus Logic provided guidance for first-quarter fiscal 2019. Owing to the ongoing sluggishness in the smartphone market, the company provided a tepid outlook for the current quarter. The company expects revenues in the range of $210–$250 million (mid-point $230 million). The Zacks Consensus Estimate is pegged at $312.6 million. The company predicts GAAP gross margin to be in the range of 48-50%. Combined GAAP R&D and SG&A expenses are anticipated between $133 million and $139 million.
Bottom Line
Cirrus Logic, a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions, ended fiscal 2018 on a dismal note with reporting disappointing results for the fourth quarter. Moreover, revenue guidance for first-quarter fiscal 2019 was unimpressive.
Management expects the sluggish demand in the smartphone market to continue for sometime now, which will eventually hurt the company’s top-line. Management is a bit conservative about visibility as the markets to which Cirrus Logic caters to are maturing, thereby recording decelerating growth.
We anticipate sluggish iPhone demand to negatively impact the company’s results, with Apple (AAPL - Free Report) reportedly being one of the largest customers of the company.
Nevertheless, management remains optimistic about the company’s product portfolio, aiming a variety of smart home applications, digital headsets and smartphones. Audio amplifier design wins along with lead design win with first generation haptic products and discussions in progress with customers for second generation products are encouraging.
Moreover, it is looking to penetrate the Android market, which we believe will reduce its dependence on Apple and broaden its ability to cater to a larger customer base.
However, it seems that it will take a long time for these initiatives to practically offset the ongoing headwinds.
Zacks Rank and Stocks to Consider
Cirrus Logic currently carries a Zacks Rank #4 (Sell).
Some of the better-ranked stocks in the broader technology sector are Micron Technology, Inc. (MU - Free Report) and Lam Research Corporation (LRCX - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term EPS growth rate for Micron and Lam Research is projected to be 10% and 17.7%, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>