What happened

Cirrus Logic (CRUS -1.96%) reported fourth-quarter results on Thursday evening. The report fell short of Wall Street's estimates, sending Cirrus shares sharply lower on Friday. The stock plunged as much as 17.5% lower in the morning session.

So what

The designer of audio controllers and mixed-signal processing chips saw fourth-quarter sales fall 5% year over year to $293.5 million. Adjusted earnings slid from $0.68 to $0.66 per diluted share. Your average analyst had been looking for earnings near $0.71 per share on revenue in the neighborhood of $302.5 million. Cirrus' management also set the midpoint of its first-quarter revenue guidance 8% below the Street's current projections.

Photo of a circuit board where a single chip is on fire.

Image source: Getty Images.

Now what

It's no surprise to see investors jumping ship on this combination of soft results and weak near-term guidance. However, the company's problems start with limited access to chip-making manufacturing lines amid a global shortage of semiconductor manufacturing capacity. Management expects these issues to linger for a while but the chip industry will surely rebuild and recover in the long run. It's kind of a nice problem to have when consumers want more of your smartphone audio and haptic feedback chips than you can produce. In the long haul, I see Cirrus as a buy at a 30% discount to January's all-time highs.