Analog chip designer Cirrus Logic (NASDAQ:CRUS) just reported results for the third quarter of fiscal year 2015. Following the freshly reported blowout results from Cirrus' largest customer, Apple (NASDAQ:AAPL), the company predictably crushed Wall Street's targets.
In the third quarter, Cirrus collected $299 million in total sales, trickling down to form adjusted earnings of $0.97 per share. Analysts would have settled for earnings of $0.75 per share on $274 million in revenues, so Cirrus left all estimates far behind.
Looking ahead, Cirrus' management expects to see about $230 million in fourth-quarter sales. Here, Wall Street's current projections point to just $198 million.
These results represent year-over-year sales growth of 37%, while earnings rose 9% higher. The results were driven by 39% higher sales of chips for portable products. This includes Cirrus Logic's audio chips for Apple's popular iPhone and iPad lines of portable electronics. In particular, Apple's iPhone sales blew past all estimates, with 74.5 million units shipped in the December quarter. Again, Cirrus benefits from every iPhone sold.
If you missed it, Cirrus recently acquired its chief rival in the audio semiconductors market, Edinburgh-based Wolfson Microelectronics. Before the buyout, Wolfson had been seen as a threat to steal Apple's audio business away from Cirrus, but that peril has now been permanently neutralized.
The Wolfson deal also puts Cirrus-owned hardware inside smartphones and tablets made by Apple rival Samsung (NASDAQOTH:SSNLF) and other designers of Android-based smartphones. The acquisition essentially made Cirrus a proxy for the mobile computing market at large.
When analysts started announcing this fact in December, Cirrus shares suddenly sprung back from several months of lagging share prices. Keep in mind that Cirrus credited "portable audio" devices for its third-quarter success, and not the iPhone in particular. Cirrus investors love to see Apple doing well, but it can now cheer the other side of the premium smartphone market as well.
Cirrus CEO Jason Rhode let his enthusiasm for the company's overall prospects bubble through in a prepared statement.
"We are very excited about the outlook for Cirrus Logic," Rhode said. "We expect to deliver year-over-year revenue growth in Q4 and FY16 driven by a continued strong market for our innovative audio and voice products, a compelling lineup of new product introductions, and significantly improved contributions from the Wolfson acquisition."