The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Cirrus Logic met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Cirrus Logic notched revenue of $122.4 million. The five analysts polled by S&P Capital IQ expected net sales of $122.0 million. Sales were 28% higher than the prior-year quarter's $95.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.43. The five earnings estimates compiled by S&P Capital IQ anticipated $0.42 per share on the same basis. GAAP EPS of $0.25 for Q3 were 26% lower than the prior-year quarter's $0.34 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 54.0%, 90 basis points worse than the prior-year quarter. Operating margin was 21.6%, 210 basis points worse than the prior-year quarter. Net margin was 13.7%, 1,200 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $103.9 million. On the bottom line, the average EPS estimate is $0.30.
Next year's average estimate for revenue is $415.5 million. The average EPS estimate is $1.25.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 612 members out of 636 rating the stock outperform, and 24 members rating it underperform. Among 123 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 118 give Cirrus Logic a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cirrus Logic is outperform, with an average price target of $25.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Cirrus Logic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.