Cirrus Logic (CRUS - Free Report) is a semiconductor company that provides products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home applications. Its products span the entire audio signal chain, and is known for producing high-performance, low-power ICs for audio and voice signal processing applications.
Q3 Earnings Beat, But Fall YoY
For Cirrus’ third quarter, earnings and revenues did beat the Zacks Consensus Estimate, but both fell significantly year-over-year (declines of 42.8% and 32.8%, respectively).
Additionally, revenue from portable audio products fell 34.2% from the prior-year quarter, while revenue from nonportable audio and other products was down 19% year-over-year.
The biggest concern for Cirrus is Apple (AAPL - Free Report) and the decline in demand for iPhones. The company generated 83% of its revenue last quarter from the tech giant, who is its largest customer.
If the demand for iPhones don’t pick back up—and it’s not looking like that will happen any time soon—then Cirrus will have a difficult time finding that growth again.
Cirrus did end Q3 with $444 million in cash, which was up from $396 recorded at the end of Q2.
Estimates are Falling
It didn’t take long for analysts to lower their estimates for fiscal 2019, and six have cut their earnings outlook in the last 60 days; our consensus has fallen 24 cents, down from $2.62 to $2.38 per share, and earnings could see year-over-year decline of 44%.
The consensus estimate has fallen for next fiscal year, too, down 70 cents from $2.80 to $2.10 per share. Five analysts have also cut their estimates for this time period as well.
CRUS is now Zacks Rank #5 (Strong Sell).
Looking ahead, Q4 revenue is forecasted to be between $200 million and $240 million, with the midpoint representing a 27% year-over-year decrease. GAAP gross margin is expected to be between 49% and 51% for the quarter.
It does look like Cirrus is making progress on the Android side of its business, and the company is continually expanding into non-smartphone products. Its heavy reliance on Apple, however, is definitely going to hurt them in the short term.
If you’re an investor looking for a chip stock to add to your portfolio, you may want to consider Synaptics Inc. (SYNA - Free Report) . This chipmaker is starting to become a major player in the Internet of Things space, and right now, sits at a #1 (Strong Buy) on the Zacks Rank. SYNA currently expects around 15% earnings growth for the year.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Cirrus Logic (CRUS - Free Report) is a semiconductor company that provides products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home applications. Its products span the entire audio signal chain, and is known for producing high-performance, low-power ICs for audio and voice signal processing applications.
Q3 Earnings Beat, But Fall YoY
For Cirrus’ third quarter, earnings and revenues did beat the Zacks Consensus Estimate, but both fell significantly year-over-year (declines of 42.8% and 32.8%, respectively).
Additionally, revenue from portable audio products fell 34.2% from the prior-year quarter, while revenue from nonportable audio and other products was down 19% year-over-year.
The biggest concern for Cirrus is Apple (AAPL - Free Report) and the decline in demand for iPhones. The company generated 83% of its revenue last quarter from the tech giant, who is its largest customer.
If the demand for iPhones don’t pick back up—and it’s not looking like that will happen any time soon—then Cirrus will have a difficult time finding that growth again.
Cirrus did end Q3 with $444 million in cash, which was up from $396 recorded at the end of Q2.
Estimates are Falling
It didn’t take long for analysts to lower their estimates for fiscal 2019, and six have cut their earnings outlook in the last 60 days; our consensus has fallen 24 cents, down from $2.62 to $2.38 per share, and earnings could see year-over-year decline of 44%.
The consensus estimate has fallen for next fiscal year, too, down 70 cents from $2.80 to $2.10 per share. Five analysts have also cut their estimates for this time period as well.
CRUS is now Zacks Rank #5 (Strong Sell).
Looking ahead, Q4 revenue is forecasted to be between $200 million and $240 million, with the midpoint representing a 27% year-over-year decrease. GAAP gross margin is expected to be between 49% and 51% for the quarter.
It does look like Cirrus is making progress on the Android side of its business, and the company is continually expanding into non-smartphone products. Its heavy reliance on Apple, however, is definitely going to hurt them in the short term.
If you’re an investor looking for a chip stock to add to your portfolio, you may want to consider Synaptics Inc. (SYNA - Free Report) . This chipmaker is starting to become a major player in the Internet of Things space, and right now, sits at a #1 (Strong Buy) on the Zacks Rank. SYNA currently expects around 15% earnings growth for the year.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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