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Cirrus Logic (CRUS - Free Report) delivered better-than-anticipated second-quarter fiscal 2022 results, wherein both the top and bottom lines not only surpassed the respective Zacks Consensus Estimate but also improved year over year.
The company reported adjusted earnings of $1.82 per share beating the Zacks Consensus Estimate of $1.63 per share. The bottom line improved 44.4% from the prior-year quarter’s reported figure of $1.26.
Total revenues of $465.9 million surpassed the Zacks Consensus Estimate of $450.7 million and increased 34.1%, year over year.
Top-Line Details
During the second quarter, the top line was mainly driven by higher Android-based smartphone volumes, increased high-performance mixed-signal contents and higher audio component shipment for laptops, partially offset by returns from wired headset codecs.
The company noted revenue contribution from the acquisition of Lion Semiconductors in this quarter. Strong momentum in audio and haptic solutions beyond smartphones acted as a tailwind for the top line.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help in achieving sustainable growth over the next year. As part of its strategic initiatives, the company has been consistently focusing on strengthening presence among its Android customers and ramping up shipments for the leading laptop original equipment manufacturers (“OEMs”).
Cirrus Logic, Inc. Price, Consensus and EPS Surprise
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 accounted for 35.4% of total revenues for the fiscal second quarter. Revenues from the same division surged a whopping 144.9% year over year to $165.1 million on solid strong demand for its camera controllers, haptics & sensing, and recently acquired fast-charging solutions. During the first six months of fiscal 2022, the segment contributed 30% of total revenues.
The Audio segment sales increased 7.5% to $300.8 million and made up 64.6% of the total revenues.
Margins
Non-GAAP gross profit of $239.2 million climbed 32.6% on a year-over-year basis. Non-GAAP gross margin, however, contracted 60 basis points (bps) to 51.3%.
Cirrus Logic’s non-GAAP operating expenses jumped 17.1% year over year to $114.5 million.
Non-GAAP operating income of $124.6 million increased 50.8% year over year. Moreover, non-GAAP operating margin expanded 300 bps to 26.8%.
Balance Sheet and Cash Flow
The company exited the fiscal 2022 second quarter with cash and marketable securities of $394.9 million compared with the $445.6 million seen at the end of the previous quarter.
Accounts receivables were $281 million compared with $136.5 million recorded in the prior quarter. It did not report any long-term debt as of Sep 25, 2021.
Outlook
For third-quarter fiscal 2022, the company projects revenues between $490 million and $530 million. At the mid-point, the guidance suggests growth of approximately 5% year over year.
Image: Bigstock
Cirrus Logic's (CRUS) Q2 Earnings & Revenues Beat Estimates
Cirrus Logic (CRUS - Free Report) delivered better-than-anticipated second-quarter fiscal 2022 results, wherein both the top and bottom lines not only surpassed the respective Zacks Consensus Estimate but also improved year over year.
The company reported adjusted earnings of $1.82 per share beating the Zacks Consensus Estimate of $1.63 per share. The bottom line improved 44.4% from the prior-year quarter’s reported figure of $1.26.
Total revenues of $465.9 million surpassed the Zacks Consensus Estimate of $450.7 million and increased 34.1%, year over year.
Top-Line Details
During the second quarter, the top line was mainly driven by higher Android-based smartphone volumes, increased high-performance mixed-signal contents and higher audio component shipment for laptops, partially offset by returns from wired headset codecs.
The company noted revenue contribution from the acquisition of Lion Semiconductors in this quarter. Strong momentum in audio and haptic solutions beyond smartphones acted as a tailwind for the top line.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help in achieving sustainable growth over the next year. As part of its strategic initiatives, the company has been consistently focusing on strengthening presence among its Android customers and ramping up shipments for the leading laptop original equipment manufacturers (“OEMs”).
Cirrus Logic, Inc. Price, Consensus and EPS Surprise
Cirrus Logic, Inc. price-consensus-eps-surprise-chart | Cirrus Logic, Inc. Quote
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 accounted for 35.4% of total revenues for the fiscal second quarter. Revenues from the same division surged a whopping 144.9% year over year to $165.1 million on solid strong demand for its camera controllers, haptics & sensing, and recently acquired fast-charging solutions. During the first six months of fiscal 2022, the segment contributed 30% of total revenues.
The Audio segment sales increased 7.5% to $300.8 million and made up 64.6% of the total revenues.
Margins
Non-GAAP gross profit of $239.2 million climbed 32.6% on a year-over-year basis. Non-GAAP gross margin, however, contracted 60 basis points (bps) to 51.3%.
Cirrus Logic’s non-GAAP operating expenses jumped 17.1% year over year to $114.5 million.
Non-GAAP operating income of $124.6 million increased 50.8% year over year. Moreover, non-GAAP operating margin expanded 300 bps to 26.8%.
Balance Sheet and Cash Flow
The company exited the fiscal 2022 second quarter with cash and marketable securities of $394.9 million compared with the $445.6 million seen at the end of the previous quarter.
Accounts receivables were $281 million compared with $136.5 million recorded in the prior quarter. It did not report any long-term debt as of Sep 25, 2021.
Outlook
For third-quarter fiscal 2022, the company projects revenues between $490 million and $530 million. At the mid-point, the guidance suggests growth of approximately 5% year over year.
Zacks Rank & Key Picks
Cirrus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer and technology sector are Salesforce (CRM - Free Report) and HP Inc. (HPQ - Free Report) , which sport a Zacks Rank #1 (Strong Buy), while Avnet (AVT - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Salesforce, HP and Avnet are currently pegged at 16.8%, 12.7% and 25.4%, respectively.