Why Cirrus Logic Shares Got Crushed

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 Cirrus Logic (NASDAQ: CRUS  ) have gotten crushed today by as much as 18% after the company presented at an investor conference.

So what: At the Barclays tech conference, Cirrus Logic CEO Jason Rhode gave a presentation that warned of margin pressures. The company also notes that the smartphone market that comprises its core business is maturing and remains very competitive.

Now what: Cirrus reiterated its guidance for the June quarter, with revenue expected in the range of $150 million to $170 million and gross margin of 50% to 52%. Of more concern to investors was that in the long term, Cirrus expects gross margins to decline to the "mid-40's" due to increased pricing pressures in the smartphone market. That would be a substantial decline that's rattled investors.

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