Cirrus Logic (CRUS) Tops Q2 Earnings & Revenue Estimates
Cirrus Logic CRUS delivered better-than-expected second-quarter fiscal 2021 results. The company’s quarterly non-GAAP earnings per share of $1.26 handily outpaced the Zacks Consensus Estimate of 89 cents. However, the bottom-line figure declined 18.7% on a year-over-year basis mainly on lower revenues, partially offset by reduced operating expenses.
Nonetheless, the company registered more than two-fold jump in quarterly earnings on a sequential basis, primarily driven by higher revenues.
Revenues
Total revenues of $347.3 million surpassed the Zacks Consensus Estimate of $310.5 million but declined 10.7% year on year. Revenues, however, jumped 43.1% sequentially on higher-than-expected unit volumes for certain components shipping in smartphones, tablets and wellness headsets.
Segment wise, portable audio product revenues (90% of total revenues) came in at $312.9 million, up 10.4% year over year. Nevertheless, non-portable audio and other products (10%) fell 12.9% to $34.4 million. Sequentially, the audio product segment’s revenues climbed 48.5%, while non-portable and other products sales grew 7.8%.
Profits & Margins
Non-GAAP gross profit of $180.4 million decreased 13.3% on a year-over-year basis. Non-GAAP gross margin contracted 160 basis points (bps) to 51.9%, chiefly due to lower revenues.
Non-GAAP gross profit increased 41.4% sequentially. Nonetheless, non-GAAP gross margin shrunk 70 bps to 51.9%.
Cirrus Logic’s non-GAAP operating expenses dropped 3.2% year over year to $97.8 million. However, operating expenses flared up 5.6% sequentially.
Non-GAAP operating income of $82.6 million dipped 22.9% year on year, but improved 133.9% sequentially. Non-GAAP operating margin of 23.8% contracted 380 bps from the year-ago quarter but expanded 920 bps from the previous quarter.
Balance Sheet and Cash Flow
The company exited the fiscal second quarter with cash and marketable securities of $284.2 million compared with the $315.9 million witnessed at the end of the prior quarter.
Accounts receivables were $181.5 million compared with the $136.5 million recorded in first-quarter fiscal 2021. Notably, the company did not have any long-term debt as of Sep 26, 2020.
Q3 Outlook
For the third quarter of fiscal 2021, the company projects revenues between $440 million and $480 million. At the mid-point, the guidance suggests growth of 23% year on year and 32% sequentially. Furthermore, the mid-point of the revenue guidance lies above the Zacks Consensus Estimate of $352.2 million.
Zacks Rank and Stocks to Consider
Cirrus Logic currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include NVIDIA Corporation NVDA, Sapiens International Corporation N.V. SPNS and STMicroelectronics N.V. STM, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for NVIDIA, Sapiens and STMicroelectronics is currently pegged at 20.1%, 5%, and 5%, respectively.
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