UPDATE: Credit Suisse Downgrades Audience to Underperform as Apple Drops Out
Credit Suisse lowered its rating on Audience (NASDAQ: ADNC) from Outperform to Underperform and reduced its price target from $22.50 to $6.80.
Credit Suisse noted, "ADNC IP Not Expected In iPhone 5. ADNC issued a press release and hosted a conference call to intimate that the company's Voice Isolation/Noise Reduction IP is not likely to be in the iPhone 5 platform as previously expected. While ADNC does not expect the iPhone 5 decision to impact the royalty revenue tail for iPhone 4S (expect $2-3m/quarter for 2013), we are lowering our 2013 royalty revenue estimate from $44.4m to $10.0m (-77%) and total revenue estimate to $160.0m from $175.0m (-9%). While the net impact to revenue is not as severe as one might fear, it results in a 75% ($0.67) reduction to EPS, as royalty GMs of 95% compare to product GM of 40-50%."
Audience closed at $18.86 on Thursday.
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Tags: Credit Suisse