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Cirrus Logic's (CRUS) Q1 Earnings Beat Estimates, Up Y/Y
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Cirrus Logic (CRUS - Free Report) delivered better-than-expected first-quarter fiscal 2021 results. The company’s quarterly non-GAAP earnings per share of 53 cents handily outpaced the Zacks Consensus Estimate of 30 cents, surging approximately 51% year on year.
This year-over-year growth was mainly driven by higher revenues and reduced operating expenses. However, the company’s bottom-line results dipped nearly 22% sequentially mainly on lower revenues compared with the fourth-quarter fiscal 2020 figure.
Revenues
Total revenues of $242.6 million also surpassed the Zacks Consensus Estimate of $226 million and improved 2% year over year as well. Increased component shipments and higher content in tablets primarily aided the top line.
However, on a sequential basis, revenues declined 13% due to reduction in unit volumes for certain components shipping in flagship smartphones. Nonetheless, increased component shipments for the recently-launched lower-cost smartphone model partially offset this sequential decline in revenues.
Segment wise, portable audio product revenues (87% of total revenues) came in at $210.7 million, up 3.8% year over year. However, non-portable audio and other products (13%) decreased 9.6% to $31.9 million. Sequentially, the audio product segment’s revenues slid 15.6%, while non-portable and other products sales increased 8%.
Profits & Margins
Non-GAAP gross profit of $127.7 million increased 4% on a year-over-year basis. Non-GAAP gross margin expanded 110 basis points (bps) to 52.6%, chiefly on supply-chain efficiencies. Favorable product mix and cost reductions on certain products were also positives.
Non-GAAP gross profit decreased 12.8% sequentially. However, non-GAAP gross margin improved 20 bps to 52.6%. The sequential improvement in gross margin mainly reflects supply-chain efficiencies.
Cirrus Logic’s non-GAAP operating expenses dropped 7.3% year over year to $92.3 million. Operating expenses also declined 6.4% sequentially.
Non-GAAP operating income of $35.3 million too surged 52.6% year on year. However, it dropped 25.8% sequentially. Non-GAAP operating margin of 14.6% expanded 490 bps from the year-ago quarter but shrunk 250 bps from the previous quarter.
Balance Sheet and Cash Flow
The company exited the fiscal first quarter with cash and marketable securities of $315.9 million compared with the $314.1 million witnessed at the end of the prior quarter.
Accounts receivables were $136.5 million compared with the $154 million recorded in fourth-quarter fiscal 2020. Notably, the company did not have any long-term debt as of Jun 27, 2020.
Cash flow from operations was $0.5 million in the fiscal first quarter. As of Jun 27, 2020, Cirrus Logic has $120 million remaining under its share-repurchase authorization.
Second-Quarter Outlook
For the second quarter of fiscal 2021, the company projects revenues between $290 million and $330 million. At the mid-point, the guidance reflects a 20% year-over-year decline but an improvement of 28% sequentially. Furthermore, the mid-point of the revenue guidance lies above the Zacks Consensus Estimate of $307.5 million.
Zacks Rank and Key Picks
Currently, Cirrus Logic carries a Zacks Rank #4 (Sell).
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
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Cirrus Logic's (CRUS) Q1 Earnings Beat Estimates, Up Y/Y
Cirrus Logic (CRUS - Free Report) delivered better-than-expected first-quarter fiscal 2021 results. The company’s quarterly non-GAAP earnings per share of 53 cents handily outpaced the Zacks Consensus Estimate of 30 cents, surging approximately 51% year on year.
This year-over-year growth was mainly driven by higher revenues and reduced operating expenses. However, the company’s bottom-line results dipped nearly 22% sequentially mainly on lower revenues compared with the fourth-quarter fiscal 2020 figure.
Revenues
Total revenues of $242.6 million also surpassed the Zacks Consensus Estimate of $226 million and improved 2% year over year as well. Increased component shipments and higher content in tablets primarily aided the top line.
However, on a sequential basis, revenues declined 13% due to reduction in unit volumes for certain components shipping in flagship smartphones. Nonetheless, increased component shipments for the recently-launched lower-cost smartphone model partially offset this sequential decline in revenues.
Cirrus Logic, Inc. Price and Consensus
Cirrus Logic, Inc. price-consensus-chart | Cirrus Logic, Inc. Quote
Segment wise, portable audio product revenues (87% of total revenues) came in at $210.7 million, up 3.8% year over year. However, non-portable audio and other products (13%) decreased 9.6% to $31.9 million. Sequentially, the audio product segment’s revenues slid 15.6%, while non-portable and other products sales increased 8%.
Profits & Margins
Non-GAAP gross profit of $127.7 million increased 4% on a year-over-year basis. Non-GAAP gross margin expanded 110 basis points (bps) to 52.6%, chiefly on supply-chain efficiencies. Favorable product mix and cost reductions on certain products were also positives.
Non-GAAP gross profit decreased 12.8% sequentially. However, non-GAAP gross margin improved 20 bps to 52.6%. The sequential improvement in gross margin mainly reflects supply-chain efficiencies.
Cirrus Logic’s non-GAAP operating expenses dropped 7.3% year over year to $92.3 million. Operating expenses also declined 6.4% sequentially.
Non-GAAP operating income of $35.3 million too surged 52.6% year on year. However, it dropped 25.8% sequentially. Non-GAAP operating margin of 14.6% expanded 490 bps from the year-ago quarter but shrunk 250 bps from the previous quarter.
Balance Sheet and Cash Flow
The company exited the fiscal first quarter with cash and marketable securities of $315.9 million compared with the $314.1 million witnessed at the end of the prior quarter.
Accounts receivables were $136.5 million compared with the $154 million recorded in fourth-quarter fiscal 2020. Notably, the company did not have any long-term debt as of Jun 27, 2020.
Cash flow from operations was $0.5 million in the fiscal first quarter. As of Jun 27, 2020, Cirrus Logic has $120 million remaining under its share-repurchase authorization.
Second-Quarter Outlook
For the second quarter of fiscal 2021, the company projects revenues between $290 million and $330 million. At the mid-point, the guidance reflects a 20% year-over-year decline but an improvement of 28% sequentially. Furthermore, the mid-point of the revenue guidance lies above the Zacks Consensus Estimate of $307.5 million.
Zacks Rank and Key Picks
Currently, Cirrus Logic carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include Benefitfocus ,Cogent Communications Holdings (CCOI - Free Report) and Synaptics (SYNA - Free Report) , all carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>