Cirrus Logic Inc.

Company Description

Cirrus develops analog and mixed-signal circuits. The semiconductor maker supports various audio and energy-related applications. The company is based in Texas but also operates in Europe and Asia.

Topped Forecasts

Cirrus just reported second-quarter results on Oct 20, beating analyst estimates. Earnings per share came in at 9 cents, a penny higher than the Zacks Consensus Estimate.

Revenue increased $2.4 million to $55.7 million, on a year-over-year basis. Gross margin remained at 52% from the prior quarter, down slightly from last year. Both figures were on target with the company's recently raised guidance.

Optimistic Outlook

In the same release, Jason Rhode, president and CEO, said "We expect further revenue growth in Q3, coupled with gross margin improvements due to a higher mix of Energy revenue as well as continued improvements to our product cost structures."

Estimates Jump

Following the report, the Zacks Consensus Estimate for the next quarter rose 5 cents, to 13 cents. Full-year estimates are up 9 cents, 19 cents, over the past month. Forecasts for next year are now averaging 43 cents, up from 27 cents.

Given the 7 cents Cirrus earned last year, the company should more than double its earnings for the next 2 years.

Financials

Cirrus has a razor thing profit margin at the moment, but that is compared to an industry that averages negative 7.4%. The company also has a ROE of 3.8%, triple its peer average of 1.3%. The semi-maker also manages to operate with no debt.

The Chart

Shares of CRUS have been volatile surrounding the Oct 5 guidance revision and Oct 20 earnings report. The stock seems to be settling in, but it could be another week or two before a direction or range in better defined. Take a look at the chart below.