Cirrus Logic Earnings Preview

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Cirrus Logic (NAS: CRUS) came in under analysts' estimates last quarter, but now has a chance to fix things this quarter. The company will unveil its latest earnings on Thursday, Jan. 26. Cirrus Logic develops high-precision, analog, and mixed-signal integrated circuits for a range of audio and energy markets.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Cirrus Logic, with four out of five rating it a buy and the remainder rating it a hold. Analysts like Cirrus Logic better than competitor Intersil overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $122 million in revenue this quarter. That would represent a rise of 27.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.39 per share. Estimates range from $0.37 to $0.40.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.8% granting it an outperform rating. The community at large agrees with the All-Stars, with 96.7% awarding it a rating of outperform. Fools are gung-ho about Cirrus Logic and haven't been shy with their opinions lately, logging 199 posts in the past 30 days. Cirrus Logic has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Cirrus Logic's profit has risen year over year by an average of more than twofold over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue rose 1% while cost of sales rose 7.8% to $47.2 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. 

QuarterQ2Q1Q4Q3
Gross Margin53.5%51.7%50.3%54.9%
Operating Margin17.6%15.5%14.9%24.2%
Net Margin11.1%9.9%142.6%25.7%

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

At the time this article was published 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.

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