Cirrus Logic: A Bad Call Is A Bad Call
Cirrus Logic Is Now Marked, Stay On The Sidelines For Now
Ashraf Eassa • 16 Comments
Ashraf Eassa • 16 Comments
Tue, Jul. 5, 10:18 AM
- Cirrus Logic (NASDAQ:CRUS) is off 7.4% and Skyworks Solutions (NASDAQ:SWKS) down 5.6% as Pacific Crest downgrades both to Sector Weight amid some disappointing iPhone supply chain forecasts.
- Qorvo (QRVO -5.5%) and InvenSense (INVN -5.1%) are down as well.
- Pac Crest has a fair value range of Cirrus Logic of $33-$36 (vs. its previous close of $38.04) and for $60-$67 on Skyworks (vs. previous close of $62.60).
- It also cut price targets on Analog Devices (ADI -1.7%) to $60 from $62 (7.7% upside); Broadcom (AVGO -2.5%) to $180 from $185 (19.7% upside) and Qualcomm (QCOM -1.3%) to $59 from $61 (12.8% upside).
- "Our lowered estimates reflect a much more disappointing second-half 2016 iPhone 7 ramp than what we had previously expected, as feedback from Asia indicates units are expected to be down 15% to 20% as compared to the iPhone 6s, as Apple appears to be taking a much more cautious view of the ramp," the analysts wrote.
Tue, Jun. 21, 9:35 AM| Tue, Jun. 21, 9:35 AM | 1 Comment
Mon, May 23, 10:53 AM
- Taiwan's Economic Daily News reports Apple (AAPL +1.7%) has ordered contract manufacturers to produce 72M-78M iPhone 7 units this year, a record figure for a new iPhone and above analyst estimates of ~65M.
- Apple is outperforming on a day the Nasdaq is up 0.3%. As are chip suppliers Cirrus Logic (CRUS +3.1%), Skyworks (SWKS +3.3%), Qorvo (QRVO +2.7%), and InvenSense (INVN +4.6%). Over in Taipei, Foxconn parent Hon Hai Precision (OTC:HNHAF) rose 4.6%, and fellow iPhone manufacturer Pegatron (OTC:PGTRF) rose 9.9%. TSMC (TSM +2.7%), which is believed to be the exclusive manufacturer of Apple's A10 processor (expected to go into the iPhone 7), is also doing well.
- The report comes with Apple having guided calendar Q2 revenue to be down 13%-17% Y/Y due to soft iPhone 6S sales. The rumor mill has indicated the iPhone 7 will feature a dual-camera array and a 256GB storage option, and do away with the 3.5mm headphone jack. The 9.7" iPad Pro's improved display suggests display enhancements are also possible.
- Now read Apple: Berkshire Hathaway Not The Only One Buying
- Update: Also reported by the Economic Daily News: Apple is prepping a "Pro" or "Premium" iPhone 7 model to go with a standard iPhone 7 and 7+.
Thu, May 5, 2:32 PM
- "The near-term weakness in the AAPL supply chain is well known at this point, but with a likely more muted [iPhone 7] cycle and content increases well understood, we would rather move to the sidelines and revisit next year," writes Barclays' Blayne Curtis, downgrading Cirrus Logic (CRUS -4.7%) to Equal Weight and cutting his target by $2 to $35.
- Curtis: "We still like the technology and continue to see LT opportunities, but struggle to identify further catalysts until next year when CRUS could see gains in the mid-tier (OEMs 3-10) for Android, another codec content increase and/or an in-box [smart codec] win at AAPL. We have not seen any evidence yet, but we are also worried that pressure at AAPL could filter down the supply chain, similar to post the [iPhone 5]..."
- He previously asserted Cirrus will likely only ship a basic audio codec ($1 ASP) rather than a smart codec supporting noise cancellation ($2-$2.50 ASP) for the digital headset expected to accompany the iPhone 7, which is widely believed to do away with the standard 3.5mm headphone jack and have all wired headsets connect through a Lightning port. However, Curtis does think Apple (NASDAQ:AAPL) will put another speaker in the space currently occupied by the 3.5mm jack, which would require another amplifier from Cirrus ($0.40-$0.50 ASP).
- Cirrus initially sold off on last week after providing soft FQ1 guidance in its FQ4 report (released in tandem with Apple's FQ2 report), but wound up posting double-digit gains the next day. Earnings call comments about design win activity, including for digital headsets and smart codecs, may have helped. Oppenheimer and Pac Crest previously upgraded on account of expected iPhone 7-related content gains.
Tue, Apr. 26, 5:01 PM
- Cirrus Logic (NASDAQ:CRUS) is down 2.7% in choppy aftermarket trading following fiscal Q4 results that beat expectations but featured below-consensus forward guidance.
- The company guided to fiscal Q1 revenues of $220M-$250M (light of a consensus for $257.5M), along with GAAP gross margin of 47-49% and combined R&D and SG&A expenses of $103M-$107M (GAAP basis, including share-based comp and amortization of acquired intangibles).
- Revenues fell more than 9% but beat forecasts. By segment: Portable audio products, $187.3M (down 11.2%); non-portable audio and other products, $44.7M (up 0.8%).
- Conference call to come at 5 p.m. ET.
- Press Release
Tue, Apr. 26, 4:35 PM
Mon, Apr. 25, 5:35 PM
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Tue, Mar. 22, 10:28 AM
- Tech news site Ars Technica reports Apple (AAPL +1.1%) is in "advanced talks" to buy U.K.-based Imagination Technologies (OTCPK:IGNMF), whose PowerVR GPU cores are used within Apple's A-series processors. Imagination is up 19.6% in London; its market cap stands at $869M.
- Acquiring Imagination would further add to Apple's chip R&D efforts. Right now, those efforts include designing the A-series chips and the custom ARM CPU cores that go into them, the M9 motion co-processor, and fingerprint sensor and LCD timing controller ICs.
- Apple already owns an 8.4% stake in Imagination, and has often trumpeted the graphics capabilities of its hardware - yesterday, the company declared the A9X processor going into the iPad Pro has more GPU power than an Xbox 360. Apple could presumably buy Imagination with offshore cash.
- An Apple/Imagination deal could spell an opportunity for ARM (ARMH -0.3%), whose Mali GPU cores compete with Imagination's PowerVR line, to take share at non-Apple Imagination customers such as Samsung. iPhone/iPad audio codec supplier Cirrus Logic (CRUS -1.1%) is down slightly - Imagination's product line includes voice pre-processing IP, but GPU cores drive the lion's share of the company's business.
- Apple is trading higher a day after revealing the 4" iPhone SE and the 9.7" iPad Pro.
- Update (11:34): Apple says it doesn't plan to make an offer to buy Imagination, while adding it did hold talks with the company.
Fri, Jan. 29, 3:27 PM
- Several Apple suppliers are seeing major gains after iPhone power amplifier supplier Skyworks (SWKS +5.5%) and iPhone LCD driver IC supplier Synaptics (SYNA +10.6%) delivered their calendar Q4 reports yesterday afternoon - Skyworks beat estimates, while Synaptics (initially lower) missed on sales and beat on EPS.
- Both companies provided soft Q1 guidance (I, II) - Synaptics also suggested it's seeing weakness at multiple top smartphone OEMs . But with nearly every other iPhone supplier to have reported (not to mention Apple itself) having also guided light, shares are rallying nonetheless.
- Big gainers include mobile DRAM supplier Micron (MU +11.1%), microphone supplier Knowles (KN +11.2%), motion sensor supplier InvenSense (INVN +7.5%), audio codec chip supplier Cirrus Logic (CRUS +6.6%), NFC chip/motion co-processor supplier NXP (NXPI +5.9%), and RF chip suppliers/Skyworks rivals Qorvo (QRVO +6.8%) and Avago (AVGO +5.6%). The Nasdaq is up 1.8%.
- Micron could also be getting a lift from the market-pleasing reports delivered by hard drive giants Seagate and Western Digital, given Micron is exposed to many of the same end-markets as Seagate/Western.
Cirrus Logic is adding to the big Thursday gains seen after the company provided encouraging FY17 comments in its FQ3 earnings call. InvenSense has more than recovered the Thursday losses seen after the company provided soft FQ4 guidance and suggested it had lost share at Samsung.
- Possibly helping Synaptics out: When asked about M&A reports on the earnings call, CEO Rick Bergman didn't quite shoot them down. "[W]e're not going to comment on rumors or market speculation ... at the end of the day it is our job to maximize shareholder value so we'll listen to any great ideas that can do that and evaluate them appropriately."
Meanwhile, Bergman asserted Synaptics' TDDI (integrated touch controller/display driver) sales are due to ramp strongly thanks to numerous design wins at top LCD panel makers, and that its ClearForce pressure-response tech will be "a significant differentiator" for Synaptics' TDDI offerings.
Thu, Jan. 28, 6:17 PM
- Initially flat after hours yesterday after providing light FQ4 guidance in its FQ3 report, Cirrus Logic (NASDAQ:CRUS) surged above $32 today.
- Likely helping out: When asked on its earnings call (transcript) about FY17 (ends March '17) growth, Cirrus suggested it could be above 15% (consensus is at 14%). "If you look at our model in general, we think one of the things -- one of the characteristics of a successful company, one of the things we pay our people on in a lot of cases is tied to 15% revenue growth. So, if were excited about revenue growth and we expect it to be strong, then you can certainly imagine that our expectations are higher than that. But again, there's all sorts of moving parts that we don't get to control."
- Oppenheimer's Rick Schafer is pleased with the FY17 commentary and has upgraded to Outperform. “We believe this [15%+] growth supports material (+60%- plus) content gains in the upcoming IP7. In a flattish smartphone unit market, our math suggests CRUS has earnings power of $4+ in CY17.”
- Three weeks ago, Pac Crest upgraded to Overweight, while suggesting Cirrus could supply a smart codec IC for noise-cancelling earbuds that the firm thinks could ship with the iPhone 7, which is expected to ditch the 3.5mm headphone jack in favor of plugging in through a Lightning port.
- Schafer offers similar commentary today: ""We believe CRUS has secured a smart codec enabling active noise cancellation in AAPL's earbuds for the IP7. CRUS saw its content in the IP6s jump ~60% to $3.50 vs the IP6. We estimate the additional smart codec socket could raise CRUS' ASP by $2+ to ~$5.50 in the IP7."
Cirrus' FQ3 results, guidance/details
Thu, Jan. 28, 9:23 AM
- Gainers: NEOS +59%. DNR +17%. BCEI +16%. UA +16%. FB +14%. INO +13%. ATHX +12%. PBR +12%. WLL +11%. MRO +10%. [[PBR-A]] +10%. TRXC +9%. CHK +9%. MLNX +9%. LINE +9%. MT +9%. SDRL +8%. HOG +8%. ETE +8%. STO +8%. CRUS 7%. KMI 7%. BBL 6%. HCA 6%. MJN 6%. CJES 6%. PYPL 6%.
- Losers: NOW -22%. OSIS -22%. EBAY -11%. INVN -10%. URI -10%. INCY -9%. JNPR -10%. OAS -7%.
Wed, Jan. 27, 4:36 PM
- Cirrus Logic's (NASDAQ:CRUS) reported FQ3 sales of $347.9M were slightly above the guidance ($347M) provided in its Jan. 7 warning. However, a day after top client Apple issued light guidance, Cirrus is guiding for FQ4 revenue of $210M-$240M, below a $260.3M consensus.
- FQ3 GAAP gross margin was 47.4%, +100 bps Q/Q and +360 bps Y/Y, and above the midpoint of a 46%-48% guidance range. FQ4 GAAP GM guidance is at 47%-49%.
- Portable audio product sales - a huge % of them go to Apple and (to a lesser extent) Samsung - rose 22% Y/Y to $308.8M. Non-portable audio and other product sales fell 14% to $39.1M. Thanks to strong R&D spend (much of it directed towards smart codec R&D), GAAP operating expenses rose 17% Y/Y to $101M.
- CRUS -0.1% after hours to $27.99.
- Cirrus' FQ3 report, earnings release
Wed, Jan. 27, 4:01 PM
- Cirrus Logic (NASDAQ:CRUS): FQ3 EPS of $0.82 beats by $0.01.
- Revenue of $347.9M (+16.5% Y/Y) beats by $1.02M.
Wed, Jan. 27, 8:18 AM
- Though expectations were low following warnings from Cirrus Logic, Qorvo, Analog Devices, and others, iPhone/iPad suppliers are down after Apple missed FQ1 (calendar Q4) revenue estimates (while beating on EPS), and offered soft FQ2 guidance - revenue of $50B-$53B vs. a $55.6B consensus and year-ago sales of $58B.
- FQ1 iPhone sales of 74.8M were close to Street expectations, but iPad and Mac shipments (16.1M and 5.3M, respectively) were below. On its earnings call, Apple mentioned forex swings and Chinese macro pressures are weighing on sales.
- Cirrus Logic (NASDAQ:CRUS), which reports this afternoon, is down 2% premarket. Qorvo (QRVO - reports Feb. 4) -2.7%, Skyworks (SWKS - reports tomorrow) -2%, Analog Devices (NASDAQ:ADI) -3%. Apple (NASDAQ:AAPL) itself is down 3.7%. Nasdaq futures are off 0.7%.
Tue, Jan. 26, 5:35 PM| Tue, Jan. 26, 5:35 PM | 26 Comments
Fri, Jan. 22, 3:30 PM
- Plenty of tech names crushed over the first 20 days or so of January are sharply higher as the Nasdaq (up 2.4%) continues rebounding from Wednesday's intraday lows. Many still have sizable YTD losses.
- Big gainers among telecom equipment/component firms: Optical component vendors Oclaro (OCLR +9.5%) and NeoPhotonics (NPTN +6%), mobile infrastructure/services giant Ericsson (ERIC +6.2%), optical networking hardware vendor Infinera (INFN +5.2%), and microcap RF backhaul hardware firms DragonWave (DRWI +24.3%) and Ceragon (CRNT +10%). Ericsson underperformed yesterday following a pre-earnings Goldman downgrade.
- Among enterprise tech firms: Threat-prevention technology and services provider FireEye (FEYE +7.7%), big data software provider Hortonworks (HDP +16.1%), security software/services firm Rapid7 (RPD +9.1%), data governance software firm Varonis (VRNS +5.6%), and flash storage array vendor Violin Memory (VMEM +13.6%). FireEye fell slightly yesterday after making a Q4 pre-announcement and announcing a $200M+ acquisition. Hortonworks was crushed on Tuesday after a Q4 pre-announcement and stock offering shelf registration.
- Among chip industry firms: RF chipmaker Skyworks (SWKS +6%), audio codec developer Cirrus Logic (CRUS +7.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +6.5%), FPGA/sensor hub maker QuickLogic (QUIK +9.2%), and chip equipment firms Axcelis (ACLS +4.9%) and Aixtron (AIXG +4.9%). Major Cirrus/Skyworks client Apple reports on Tuesday afternoon.
- Also up big: 3D printer maker 3D Systems (DDD +7.1%), Russian search leader Yandex (YNDX +7.5%), mortgage origination software firm Ellie Mae (ELLI +6.4%), Chinese solar firm Yingli (YGE +11.4%), and SMB Web services provider Wix.com (WIX +5.3%).
- Previously covered: Rosetta Stone, Live Ventures, HP Enterprise, Mitel, Mobileye, Qorvo, SunPower, SolarCity
Cirrus Logic, Inc. is engaged in the development of analog and mixed-signal integrated circuits for audio and energy markets. It delivers optimized products for consumer and commercial audio, automotive entertainment, and targeted industrial and energy-related applications. It also develops... More
Industry: Semiconductor - Specialized
Country: United States
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