Cirrus Logic Earnings Preview

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Investors are braced for a bumpy ride ahead of Cirrus Logic's (NAS: CRUS) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Wednesday. Cirrus Logic develops high-precision, analog, and mixed-signal integrated circuits for audio and energy markets.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Cirrus Logic, with three of five rating it a buy and the remainder rating it a hold. Analysts like Cirrus Logic better than competitor Intersil overall. Cirrus Logic's rating hasn't changed over the past three months.
  • Revenue Forecasts: On average, analysts predict $102.7 million in revenue this quarter. That would represent a rise of 2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.30 per share. Estimates range from $0.28 to $0.31.

What our community says:
CAPS All-Stars are solidly backing the stock with 95.2% giving it an "outperform" rating. The community at large agrees with the All-Stars with 96.9% awarding it a rating of "outperform." Fools are gung-ho about Cirrus Logic and haven't been shy with their opinions lately, logging 191 posts in the past 30 days. Even with a robust four out of five stars, Cirrus Logic's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Cirrus Logic's profit has risen year over year by an average of more than threefold over the past five quarters. The company's gross margin shrank by 5.3 percentage points in the last quarter. Revenue rose 12.6% while cost of sales rose 26.6% to $44.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

51.7%

50.3%

54.9%

56.4%

Operating Margin

15.5%

14.9%

24.2%

28.9%

Net Margin

9.9%

142.6%

25.7%

30.7%

For all our Cirrus Logic-specific analysis, including earnings and beyond, add Cirrus Logic to My Watchlist.

The Motley Fool owns shares of Cirrus Logic.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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