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Cirrus Logic (CRUS) Tops Q3 Earnings & Revenue Estimates

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Cirrus Logic CRUS reported better-than-expected third-quarter fiscal 2021 results. The company’s quarterly non-GAAP earnings per share of $2.13 outpaced the Zacks Consensus Estimate by 13.9%. Moreover, the bottom line grew 51.1% on a year-over-year basis, mainly driven by higher revenues.

Revenues

Total revenues of $485.8 million not only surpassed the Zacks Consensus Estimate of $463 million but also increased 30% year over year. The top line, however, jumped 43.1% sequentially on higher-than-expected unit volumes for certain components shipping in recently launched smartphones.

Segment wise, portable audio product revenues (93% of total revenues) came in at $450.3 million, up 30.6% year over year. Moreover, non-portable audio and other products (7%) grew 19% to $35.5 million.

Cirrus Logic, Inc. Price, Consensus and EPS Surprise

Cirrus Logic, Inc. Price, Consensus and EPS Surprise
Cirrus Logic, Inc. Price, Consensus and EPS Surprise

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

Profits & Margins

Non-GAAP gross profit of $251.7 million increased 27.2% on a year-over-year basis. Non-GAAP gross margin, however, contracted 90 basis points (bps) to 51.8%.

Cirrus Logic’s non-GAAP operating expenses jumped 2.5% year over year to $105.8 million.

Non-GAAP operating income of $145.9 million surged 54.2% year over year. Non-GAAP operating margin of 30% expanded 470 bps.

Balance Sheet and Cash Flow

The company exited the fiscal third quarter with cash and marketable securities of $370.6 million compared with the $284.2 million witnessed at the end of the prior quarter.

Accounts receivables were $244.8 million compared with the $181.5 million recorded in second-quarter fiscal 2021. Notably, the company did not have any long-term debt as of Dec 26, 2020.

Q4 Outlook

For the fourth quarter of fiscal 2021, the company projects revenues between $280 million and $320 million. At the mid-point, the guidance suggests growth of 7.5% year over year. The mid-point of the revenue guidance lies below the Zacks Consensus Estimate of $307.9 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 Texas Instruments Incorporated TXN, Zoom Video Communications ZM and Shopify SHOP, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Texas Instruments Incorporated, Zoom Video Communications and Shopify is currently pegged at 9.33%, 25%, and 32.5%, respectively.

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