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Cirrus Logic (CRUS) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

Cirrus Logic, Inc. CRUS is slated to release second-quarter fiscal 2020 results on Oct 30.

For the fiscal second quarter, the company expects revenues between $300 million and $340 million. The Zacks Consensus Estimate is pegged at $312.13 million, indicating a drop of 12.33% from the year-ago reported figure.

The Zacks Consensus Estimate for earnings stands at 95 cents, suggesting a 12% decline from the year-earlier reported number.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 108.08%.

In the last reported quarter, the company delivered non-GAAP earnings per share of 37 cents, which topped the Zacks Consensus Estimate of 11 cents as well as the prior-year figure of 28 cents.

Total revenues of $238 million also surpassed the Zacks Consensus Estimate of $222 million. However, the top line was down 6.4% year over year and 1% sequentially as well due to weaker sales of portable audio products shipping in smartphones, digital headsets and adapters.

Cirrus Logic, Inc. Price and EPS Surprise

Cirrus Logic, Inc. Price and EPS Surprise

Cirrus Logic, Inc. price-eps-surprise | Cirrus Logic, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

Cirrus Logic’s second-quarter fiscal 2020 results are likely to benefit from the company’s strong product portfolio comprising audio, voice and other adjacent market items, such as haptics.

The company is likely to have gained from its steadfast execution target, a wider customer base and efforts to capitalize on solid demand for powerful audio and voice components.

Robust design momentum with the existing and new customers across its product portfolio might reflect on the numbers as an upside.

Further, the company’s growing share in the Android market and new product development activities are expected to have been steady key catalysts. With Apple AAPL adopting new custom smart codecs for latest iPhones, content growth is likely to have been boosted.

However, Cirrus Logic’s heavy dependence on Apple is a point of concern. Persistent decline in iPhone sales is likely to have posed a key threat to its top-line results. Moreover, slowing growth at Samsung might have been a downside.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for Cirrus Logic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cirrus Logic’s Zacks Rank #2 and an Earnings ESP of 0.00% make surprise prediction difficult.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +4.17% and a Zacks Rank of 1. The company is slated to release quarterly results on Nov 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

MeetMe, Inc. MEET has an Earnings ESP of +4.17% and a Zacks Rank of 2. The company is scheduled to report quarterly results on Nov 7.

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