Cirrus Logic Shares Plunge 6% On Weak Outlook, But Q3 Results Top View

(RTTNews) - Shares of Cirrus Logic, Inc. (CRUS) plunged nearly six percent in Tuesday's extended trading after the semiconductor company provided revenue guidance for the third quarter, well below Street view.

The company also reported a profit for the third quarter that declined from last year, reflecting a significant drop in margins and lower audio product sales. However, both adjusted earnings per share and quarterly revenues topped analysts' expectations.

Cirrus Logic develops high-precision, analog and mixed-signal integrated circuits for a range of audio and energy markets.

"We delivered strong revenue, operating profit and EPS results for the third quarter," President and CEO Jason Rhode said in a statement.

The Austin, Texas-based company reported net income of $41.50 million or $0.63 per share for the third quarter, lower than $67.86 million or $0.99 per share in the prior-year quarter.

Excluding special items, adjusted net income for the quarter was $58.10 million or $0.89 per share, compared to $112.80 million or $1.64 per share in the year-ago quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.77 per share for the quarter. Analysts' estimate typically exclude special items.

Net revenues for the quarter declined to $218.88 million, from $310.13 million in the same quarter last year, but topped nine Wall Street analysts' consensus estimate of $213.30 million.

The drop in revenue was due mainly to lower audio products sales at $206 million, compared to $300 million last year. This was partially offset by energy products sales growth to $12.50 million from $10.76 million last year.

Operating margin for the quarter contracted a significant 1000 basis points to 24 percent, as gross margin contracted 360 basis points and higher expenses.

Looking ahead to the fourth quarter, the company expects revenues in a range of $130 million to $150 million, with Street currently looking for revenues of $173.80 million. Gross margin is projected between 47 and 49 percent.

"While our business is typically driven by product cycles that weight our revenue more heavily towards the September and December quarters, we expect to exceed our operating profit goal of 20 percent in FY14 and we remain committed to this long-term target," Rhode added.

CRUS closed Tuesday's regular trading session at $18.74, down $0.88 or 4.49% on a volume of 5.21 million shares. The stock lost a further $1.04 or 5.55% in after hours trading.