News Column

Cirrus Logic's results top Wall Street estimates

April 25, 2014

By Brian Gaar and Claudia Grisales, Austin American-Statesman



April 25--Austin-based Cirrus Logic Inc. saw profit and revenue fall in its fiscal fourth quarter -- but the company beat Wall Street estimates and forecast stronger revenue ahead, sending its stock higher.

Cirrus Logic, which supplies audio chips for Apple Inc. products such as the iPhone, said it posted a profit of $12.6 million, or 20 cents a share, for the quarter ending March 29. That's down 52 percent from $26.4 million, or 39 cents a share, during the same quarter a year ago. Revenue fell to $149.7 million from $206.9 million, a 27.7 percent decline.

However, Cirrus -- which has about 650 employees in Austin -- forecast revenue of $135 million to $155 million for the quarter ending in June. That's well above analysts' average expectations of $135.5 million, according to Thomson Reuters. Excluding items, the company earned 41 cents per share. Analysts had expected 32 cents per share, according to Thomson Reuters.

Cirrus Logic shares closed Thursday up $1.40, or 7.3 percent, to $20.63. The stock rose another 3.5 percent, to $21.35, in after-hours trading following the earnings report's release.

Cirrus executive lauded the results, saying the figures bode well for the coming year.

"Cirrus Logic is exiting (fiscal year 2014) with a robust road map," president and CEO Jason Rhode said in a conference call following the earnings release. "This past year we strengthened existing customer relationships and established new relationships with key players in the markets we serve, all of which are vital for future growth."

Earlier this year, Cirrus unveiled a line of voice processing chips that aim to give consumers a better audio experience on their smartphones.

Officials said the company's new voice processors will improve the voice recognition capabilities of smartphones and other mobile devices. And the chips also promise to add new functionality to phones, as well.

The chips could be key for the future of Cirrus, which employs about 650 people in Austin and went from less than $200 million in revenue in 2006 to $725 million in revenue in just audio last year.

The new chips have obvious implications for Cirrus' biggest customer, Apple, although the company doesn't mention the computing giant by name.

Cirrus also makes energy-related products, including LED light controllers, which executives have said could contribute to future revenue growth as early as next year.

Rhode also pointed to the acquisition of last fall of Arizona-based Acoustic Technologies, a company that makes voice processing technology, including noise reduction.

"As we move into (fiscal year 2015), we are excited to introduce new custom and catalog products that are expected to broaden our footprint in the audio market and fuel long-term growth," Rhode said.

For the full fiscal year, Cirrus' revenues fell to $714.3 million, down 12 percent from $809.8 million a year earlier. Profit fell 20.1 percent from $136.6 million to $108.1 million.

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Source: Austin American-Statesman (TX)