Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of fabless semiconductor company Cirrus Logic (Nasdaq: CRUS ) are off to the races, up as much as 24% after reporting solid first-quarter growth and blowing second-quarter estimates out of the water.
So what: Cirrus, which makes audio technology for Apple's (Nasdaq: AAPL ) iPhone 4S, reported a profit of $0.22 (excluding one-time items) on a 7% rise in sales. Now here's where things get interesting. Cirrus expects that sequential revenue will grow 70% to 90% in the second quarter to a range of $170 million to $190 million. That's not even close to Wall Street's projections of $130 million in revenue. The boost could signal big wins for Cirrus Logic with Apple's upcoming iPhone 5 or the iPad Mini (or both).
Now what: As goes Apple, so goes Cirrus. The company currently relies on Apple for roughly 70% of its revenue, so the huge boost can only mean one thing: The iPhone 5 release is going to be huge. Either Cirrus has added to its impressive license wins with the iPhone 5 or it's been chosen for the iPad Mini. Regardless of whether it's one, the other, or both, this is another reason to be excited about Cirrus Logic. It's leading the field in audio innovation (amplifiers, noise suppression, and echo cancellation) and that's translating into big bottom-line results.
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