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Cirrus Overcomes Weak iPhone 7 Build, But PacCrest Sees Limited Upside

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Cirrus Logic, Inc. (NASDAQ: CRUS) reported its June quarter revenue and EPS ahead of expectations, despite a weak iPhone 7 build. Pacific Crest’s John Vinh maintained a Sector Weight rating on the company, citing the stock's recent outperformance.

Cirrus reported its FQ1 revenue and EPS at $259 million and $0.44, above the consensus estimate of $237 million and $0.28, respectively. The company guided to FQ2 revenue of $395 million at the midpoint, also beating the consensus expectation of $321 million. This implies EPS of $1.07, above the consensus estimate of $0.66, analyst John Vinh mentioned.

Content Increase

While Cirrus had been expected to gain at least $1.50 in incremental content in Apple Inc.’s (NASDAQ: AAPL) iPhone 7 from a smart codec and boosted amplifier, guidance implies an incremental $2.50 in content, which translates to a 70 percent increase, Vinh noted. He added, however, that these expectations are now reflected in Street estimates.

Weaker iPhone 7 Build

“Consistent with results seen from Skyworks, Texas Instruments, AMS, Knowles and DLG, Cirrus noted that it was seeing a more cautious iPhone 7 ramp compared to the iPhone 6s…We continue to believe that iPhone 7 component order ramp this year in 2H16 is tracking down 15%-20% compared to the iPhone 6s in 2H15,” the analyst wrote.

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Latest Ratings for CRUS

Apr 2017Pacific CrestUpgradesSector WeightOverweight
Mar 2017OppenheimerDowngradesOutperformPerform
Dec 2016SusquehannaInitiates Coverage OnPositive

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Posted-In: John Vinh Pacific CrestAnalyst Color Reiteration Analyst Ratings


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