Cirrus Logic’s results beat expectations

25. ledna 2013 v 3:59 |  solar charger
Cirrus Logic Inc. surprised wary investors Thursday by reporting strong-than-expected financial results for its fiscal third quarter based on explosive growth in sales of chips for smart phones and other mobile devices.

Cirrus, reported a net profit of $67.9 million, or 99 cents a share, on strong revenue of $310 million for the quarter ended Dec. 29. Revenue was up by 153 percent from the same quarter last year.

Those results were released after investors sent Cirrus' stock plunging downward by $3.24 a share, or 10.8 percent, to close at $26.71. Investors apparently were concerned by the disappointing results posted Wednesday by Apple Inc., Cirrus' largest customer. The stock recovered by about 1 percent in after-hours trading.

But the company gave more muted guidance for the current quarter - saying it expects to see revenue between $200 million and $220 million, a sharper-than-expected drop because it some sales were made a quarter earlier than it expected.

The fiscal third quarter "was a great quarter for Cirrus Logic as demand for multiple new products in portable audio drove revenue above our expectations," said CEO Jason Rhode in a statement. Rhode said the company "gained traction" in the quarter from portable audio chips and chips that control LED lights.

"Our outlook for the year remains on track and we are positioned well for further growth in (fiscal year) 2014" which starts in April, Rhode said. "We continue to see significant opportunities to grow our business with both and existing customers."

Apple accounted for 91 percent of the Austin company's revenue in the latest quarter, but Rhode told analysts that the company is making strides to diversify its customer base.

The company has agreed to supply another smart phone maker with some of its standard audio chips, and Rhode said that relationship might grow into a custom development agreement in the future.

Rhode said the company also is making progress in selling more of its chips that control LED lighting systems.

Technology analyst Patrick Moorhead with Moor Insights & Strategy said investors are well aware of Cirrus' close ties to Apple.

"They are tied hip-to-hip," Moorhead said. "That is great when Apple is on the upswing, but the are on a perceived downswing right now."

Apple remains an amazingly strong company, Moorhead said, but its growth has slowed as it has run into more and stronger pressure from competitors such as Samsung Electronics Co., the world's largest cell phone maker.

"Cirrus doesn't need to disconnect from Apple. They just need to ride this out," Moorhead said.

Cirrus avoids talking about the details of its Apple relationship. Analysts say the Austin company has supplied chips for Apple smart phones and tablets for the past three years. But last year, analysts add, it began supplying new chips to Apple that enable improved voice quality in smart phones by muting background noise when the user is talking on the phone.

Despite investor concerns, Rhode said his company continues to have major growth prospects in front of it.

"We are seeing a lot of opportunity with voice interaction in mobile devices, but eventually we think those (products) will permeate automobiles and homes and you name it," Rhode said.

The company's continuing challenge, the CEO said, is hiring enough talented product engineers to keep up with demand from promising new customers. It wants to hire about 20-30 new people a quarter, most of them engineers.

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