I don't know if you noticed, but Apple (Nasdaq: AAPL ) just posted a pretty decent quarter. The audio chips in nearly every gadget Apple makes come from Cirrus Logic (Nasdaq: CRUS ) . Ergo, it's hardly a surprise to see Cirrus beating estimates in the fourth quarter.
Not by much, mind you. Analysts have caught on to the Apple-Cirrus symbiosis. The company reported earnings of $0.36 per share on $110.6 million in sales, ahead of Wall Street's $0.34 and $110.1 million estimates, respectively. Management expects to double inventories on hand in the first quarter while direct sales slow down, preparing for a bulge in the second quarter. If you still don't get the magnitude of the September boost that's coming down the pipe, Cirrus even opened a fresh $100 million revolving credit line that it "may need in order to support the production ramps of multiple new products this fall."
The next-generation iPhone (Will it be the iPhone 5 at long last? iPhone 4GS? "The new iPhone"? Place your bets, ladies and gentlemen!) is one likely catalyst for these moves, and the timing of it all would point to the phone hitting store shelves around the back-to-school season. But the iPhone 4S was also pretty huge last year, yet Cirrus never needed to prepare for the launch in such a dramatic manner. Does Apple have any new tricks up its sleeve -- the kind of high-volume gadget that would move millions of units in its first quarter? Stay tuned for more innuendo.
In other news, smartphone makers not named Apple are starting to ask for higher-quality sound systems. A new line of audio amplifier chips is opening up whole new markets across the mid-range and high-end phone industry.
And outside the mobile sector altogether, Cirrus shipped 500,000 power controllers for LED lighting solutions this quarter. That brand-new market should open up later on; CEO Jason Rhode wants to ship between 5 million and 10 million LED controllers in the just-started 2013 fiscal year.
It never hurts to diversify a smidgen, especially if both of your core markets are high-growth opportunities. So now you can buy Cirrus as a proxy for Apple in the smartphone field, or as a proxy for Cree (Nasdaq: CREE ) in LED lighting. Don't forget that lightbulbs are on the way out, paving the way for Cree and its sector rivals to hit the mainstream in a big way. Cirrus caught that wave at a very opportune time. This stock has already soared 66% in 2012. Is Cirrus the next rule-breaking multibagger?