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Cirrus sinks as 1Q revenue misses estimates

NEW YORK (AP) -- Shares of Cirrus Logic Inc. tumbled Friday after the chipmaker reported disappointing fiscal first-quarter revenue.

THE SPARK: The Austin, Texas, company reported its quarterly results after the market closed on Thursday. Cirrus said its net income and revenue both improved, but its sales fell short of Wall Street expectations.

The company said its revenue grew 57 percent, to $155.1 million from $99 million a year ago. Revenue from audio products surged 78 percent to $143.7 million while revenue from energy products fell to $11.5 million from $18.3 million.

Analysts had forecast $160.2 million in revenue, according to FactSet. The company's fiscal first quarter ended June 29.

Cirrus reported $206.9 million in revenue in the fiscal fourth quarter, including $196.1 million in audio product revenue.

THE BIG PICTURE: Cirrus Logic's audio chips are used in Apple Inc.'s iPod and iPad. In April the company forecast disappointing first-quarter results, saying sales of a particular chip had slowed down because one of its customers was switching to a newer component.

Cirrus said its net income rose to $20.6 million, or 31 cents per share, from $6.9 million, or 10 cents per share. The company said it earned 56 cents per share if one-time items are excluded. Analysts expected earnings of 49 cents per share.

The company is projecting revenue of $170 million to $190 million for the fiscal second quarter. Analysts had expected $190 million in revenue on average before the earnings report. They lowered that to $181.8 million by midday Friday.

THE ANALYSIS: Canaccord Genuity analyst Bobby Burleson said the company's sales to Apple were weaker than in the first quarter, and those sales also made up a smaller portion of Cirrus' revenue.

"The sequential revenue decline was driven by weakness in sales to Apple, down 32 percent quarter-over-quarter," he said.

Burleson rates Cirrus Logic shares at "Hold" with a price target of $18.

SHARE ACTION: Cirrus Logic stock fell $2.71, or 13.4 percent, to $17.61 in midday trading. The stock is trading around annual lows and has lost half its value since the end of October.