I just listened to this morning's presentation, and I can't find anything shocking in it. The market is wildly reacting to a decline to mid 40's margins, which is still a great margin, and Jason touting a 15% average growth target. I'd love to have those sort of numbers to work with. As he said, Cirrus is a company that "makes sure that they take care of the customers who got them where they are." Sounds like they are revamping to meet Apple's new needs/products. Just a pause, in my opinion. Company is not vanishing.
Jason got the new news out as fast as they could ...the conf was scheduled in advance. This is breaking news.
End result they cut gm 50-52 to mid to high 40's to stay competitive .... Aka fend off competition ..... Give up a little gm to keep apple happy.
They did not talk to any new products in q3 or q4 when asked in the Q&A session.
Long term goals are the same grow revenues 15% annually with 20% operating profits
Had some interesting things to say about work that they are doing with 55nm die that will allow then to do more signal processing .... 55nm not shipping yet.
Voice processing expansion beyond portable audio
New tier one customer expected to launch this summer with beam forming processing
LED expanding on target
Long term sounds good .... This is a short term speed ump
It sounded to me like he was trying to play the "brutally honest executive" card. I've seen it before with VELT (although to be fair velti is a piece of #$%$), as well as a little bit with LF's CFO and DOLE's management as well. His tone sounded as if he just found out he had a terminal illness, and he failed to point out any positive reasons for lowering margins. His "this just happens sometimes, what are you gonna do?" attitude is what really threw me off. That being said, I think the board is probably making him run suicides right now and until he sweats all that apathy out of his system. CEO's (and other high executives) often don't realize what an impact a few words can have, despite the fact that this happens relatively frequently.
Its not that the news isn't material, it certainly means something. However, I think the 20 percent drop could have been avoided if he merely stated why he thinks CRUS is still in a good position and why exactly the margin is getting lowered. If AAPL wants lower costs, just admit it and then discuss the fact that if AAPL does well, CRUS does well. I get the idea that a lot of investors think this is the beginning of the end for CRUS and that AAPL will slowly squeeze them out, then drop them and use someone else...I don't see it that way. I see AAPL with a whole #$%$ LOAD of pressure on them to improve shareholder value. For AAPL this means lowering costs, while make high quality products, and then selling a whole lot of them. CRUS is the best at what they do, and if AAPL does well CRUS does well...the end.