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Cirrus Logic's (CRUS) Q2 Earnings: What's in the Offing?
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Cirrus Logic, Inc. (CRUS - Free Report) is scheduled to report second-quarter fiscal 2019 results on Nov 1. The company beat estimates twice in the trailing four quarters, delivering an average positive surprise of 89.31%.
Notably, in the last reported quarter, it came up with a positive earnings surprise of 366.67%. Higher-than-expected demand for portable audio and features for enhanced user experience in the company’s target markets drove the results.
However, the top line declined 20.7% year over year in spite of outpacing the Zacks Consensus Estimate. The bottom line also declined 65.4% due to lower revenues and higher operating expenses.
For the fiscal second quarter the company projects revenues between $310 million and $350 million.
Let's see how things are shaping up for the upcoming announcement.
Factors to Consider
Cirrus Logic’s focus on execution, expansion of customer base and efforts to capitalize on rising demand for powerful audio and voice components are expected to show results in the to-be reported quarter.
Of late, Cirrus Logic has been witnessing an increase in design wins in the Android market.
Moreover, the company’s strengthening product portfolio, aimed at a variety of smart home applications, digital headsets and smartphones, is a positive. 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.
Nonetheless, according to the company’s most recent annual report, 81% of revenues came from sales of sound technology to Apple (AAPL - Free Report) . We have earlier seen that sluggish demand for smartphones, especially iPhone X, led to production cuts, which took a toll on Cirrus, reflecting in its quarterly results. This is expected to remain an overhang on the soon-to-be-reported quarter as well.
Moreover, as the sluggishness in the smartphone market continues, the top line is likely to stay under pressure in the fiscal second quarter.
Furthermore, the U.S.-China trade war has sharply affected the semiconductor market in general. Being a supplier of fabless semiconductors, we believe that this will keep Cirrus Logic’s revenues under pressure.
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Cirrus Logic has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Fortinet, Inc. (FTNT - Free Report) with an Earnings ESP of +0.16% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Cirrus Logic's (CRUS) Q2 Earnings: What's in the Offing?
Cirrus Logic, Inc. (CRUS - Free Report) is scheduled to report second-quarter fiscal 2019 results on Nov 1. The company beat estimates twice in the trailing four quarters, delivering an average positive surprise of 89.31%.
Notably, in the last reported quarter, it came up with a positive earnings surprise of 366.67%. Higher-than-expected demand for portable audio and features for enhanced user experience in the company’s target markets drove the results.
Cirrus Logic, Inc. Price and EPS Surprise
Cirrus Logic, Inc. Price and EPS Surprise | Cirrus Logic, Inc. Quote
However, the top line declined 20.7% year over year in spite of outpacing the Zacks Consensus Estimate. The bottom line also declined 65.4% due to lower revenues and higher operating expenses.
For the fiscal second quarter the company projects revenues between $310 million and $350 million.
Let's see how things are shaping up for the upcoming announcement.
Factors to Consider
Cirrus Logic’s focus on execution, expansion of customer base and efforts to capitalize on rising demand for powerful audio and voice components are expected to show results in the to-be reported quarter.
Of late, Cirrus Logic has been witnessing an increase in design wins in the Android market.
Moreover, the company’s strengthening product portfolio, aimed at a variety of smart home applications, digital headsets and smartphones, is a positive. 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.
Nonetheless, according to the company’s most recent annual report, 81% of revenues came from sales of sound technology to Apple (AAPL - Free Report) . We have earlier seen that sluggish demand for smartphones, especially iPhone X, led to production cuts, which took a toll on Cirrus, reflecting in its quarterly results. This is expected to remain an overhang on the soon-to-be-reported quarter as well.
Moreover, as the sluggishness in the smartphone market continues, the top line is likely to stay under pressure in the fiscal second quarter.
Furthermore, the U.S.-China trade war has sharply affected the semiconductor market in general. Being a supplier of fabless semiconductors, we believe that this will keep Cirrus Logic’s revenues under pressure.
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Cirrus Logic has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Vishay Intertechnology (VSH - Free Report) with an Earnings ESP of +0.62% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortinet, Inc. (FTNT - Free Report) with an Earnings ESP of +0.16% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>