Cirrus’ 3Q Sales Beat Estimates On Smartphone Demand; Shares Fall 7%

Shares of Cirrus Logic dropped about 7% in Monday’s extended trading session, even as the fabless semiconductor supplier reported better-than-expected fiscal third quarter 2021 results.

In the three months ending Dec. 26, Cirrus Logic (CRUS) posted earnings of $2.13 per share, which came in ahead of the Street’s estimates of $1.86 per share and increased 51.1% year-over-year. The company’s quarterly sales of $485.8 million jumped about 30% year-over-year and exceeded analysts’ expectations of $460.8 million, driven by smartphone demand.

Cirrus CEO John Forsyth said, “Cirrus Logic delivered revenue above the high end of guidance in the December quarter, as we experienced strong demand for products shipping in recently introduced smartphones.”

“Given the strength of the current smartphone market cycle, and the new product introductions in the pipeline, we are excited about the outlook for the company,” Forsyth added.

As for 4Q, the company foresees revenue in the range of $280 million to $320 million. Analysts were looking for $297.8 million. (See Cirrus Logic stock analysis on TipRanks)

Following the results, Oppenheimer analyst Rick Schafer maintained a Hold rating on the stock. In a note to investors, Schafer said, “We believe CRUS’ new power conversion and control IC [integrated circuit] remains on track for a 2H21 iP13 ramp, with content opportunity significantly exceeding CLC’s [Combined Loading Compression] ~$0.50.”

However, the analyst added that “Customer concentration (Apple ~87% of sales) and valuation keep us sidelined.”

Overall, consensus among analysts is a Moderate Buy based on 6 Buys and 3 Holds. The average analyst price target of $95 implies downside potential of about 2.9% to current levels. Shares have gained 27.4% in one year.

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