Shares of Cirrus Logic (NASDAQ:CRUS) jumped Thursday after the audio chip developer reported its fiscal first-quarter 2020 results. While revenue declined, much like it did during the previous quarter, the company beat analyst estimates across the board, and it provided better-than-expected guidance. The stock was up about 20.3% at 12:20 p.m. EDT.
Cirrus Logic reported first-quarter revenue of $238.3 million, down 6.4% year over year but $17.2 million above the average analyst estimate. The company saw strong demand for its amplifiers and smart codecs shipping in handsets, which drove revenue to the high end of its guidance range.
Non-GAAP (adjusted) earnings per share came in at $0.35, up from $0.28 in the prior-year period and $0.20 higher than analysts were expecting. Gross margin jumped 2.5 percentage points to 51.4%, and total operating expenses declined 9.5% year over year. Those improvements more than offset the lower revenue and drove earnings higher.
"We remain focused on product development execution, increasing penetration of new and existing customers, and continuing to capitalize on demand for low-power, low-latency audio, voice, and other signal-processing components, which we believe will position the company for long-term success," said CEO Jason Rhode in the earnings release.
For the second quarter, Cirrus Logic expects to produce revenue between $300 million and $340 million, along with a gross margin between 51% and 53%. That revenue guidance range is wholly above the consensus analyst estimate of $297.9 million. The company produced revenue of $366.3 million in the second quarter of fiscal 2019, so this guidance still represents a substantial decline.
While Cirrus is still suffering from declining revenue, its results and guidance weren't as bad as analysts feared. That was enough for investors to push up the stock price.