TECHNOLOGY

Austin's Cirrus Logic tops Street projections

Nicole Cobler
ncobler@statesman.com
Cirrus Logic beat Wall Street expectations in its quarterly earnings report released Wednesday. [Courtesy of Cirrus Logic]

Austin-based Cirrus Logic beat Wall Street revenue predictions in its fiscal fourth quarter earnings report Wednesday, despite a year in which the chipmaker saw lower demand of its portable audio products for smartphones.

Cirrus Logic reported revenue of $240.4 million for the company's fiscal fourth quarter, a 21 percent decline year-over-year that beat Wall Street expectations, which were for about $219 million. The company reported earnings per share of 10 cents. Earnings adjusted for one-time gains and costs were 37 cents per share. Analysts had projected profit of 11 cents per share.

For its full fiscal year, Cirrus reported revenue of $1.19 billion, down 24 percent year-over-year, and reported earnings per share of $1.46.

Cirrus Logic, which provides audio chips for Apple's iPhone sales and headphone dongles, has seen its revenue drop as Apple Inc. struggles with a decline in iPhone sales. Cirrus typically declines to name its biggest customer, but it is well established within the industry that it is Apple.

Analysts say Cirrus Logic has struggled to diversify its customer portfolio, making the company largely dependent on Apple. Other customers have included Motorola, Samsung and Sony, but Cirrus Logic’s Apple-related revenue makes up roughly 80 percent of the company’s annual revenue.

READ MORE: Slowdown for Apple could ripple through Austin's tech sector

Apple on Tuesday reported a 17 percent drop in iPhone revenue and a 30 percent drop in iPhone shipments in its quarterly earnings report.

Cirrus Logic president and CEO Jason Rhode acknowledged the year's smartphone challenges, saying in a letter to shareholders that revenue for the full fiscal year was lower than anticipated because of the reduction in sales of portable products shipping in smartphones, digital headsets and adapters.

"Although smartphone market headwinds brought challenges this past year, revenue for the quarter was at the high end of guidance," Rhode said. "We are pleased with our progress in FY19 as we executed on key strategic initiatives and gained momentum with new product lines, while expanding our customer base."

Despite the decline, the company reported that it has expanded into the Android market, adding another large customer in the fourth quarter. And the company said it has gained momentum with its haptic driver product line to move beyond audio and voice.

In a letter to investors, the company reported that its largest customer contributed 78 percent of revenue for the full fiscal year. In the fourth quarter, two customers contributed more than 10 percent of total revenue, generating 66 percent and 15 percent of sales.

For the company's first quarter, Cirrus expects revenue to range between $200 million and $240 million, in line with analyst predictions.

Cirrus Logic's share price was up roughly 1 percent in after-hours trading following the earnings report.