Apple supplier Cirrus's profit beats, looks to diversify customers
(Reuters) - Cirrus Logic Inc (CRUS.O) reported quarterly results above estimates as demand for its audio chips exceeded expectations towards the end of the quarter, and the Apple Inc (AAPL.O) supplier said it had scored a design win at a tier-one mobile handset maker.
Cirrus shares were up about a percent in after-hours trading. The stock had closed down 11 percent at $26.71 in regular trading Thursday after Apple shares slumped on disappointing holiday-period iPhone sales.
Investors have worried that Cirrus' dependence on Apple — it gets three-quarters of its revenue from the iPhone maker — might hamper revenue growth, but most analysts covering the company remained bullish on the stock.
Stifel Nicolaus's Erik Rasmussen said the negativity on both Cirrus and Apple were overdone and there was room for Cirrus to grow.
Revenue from the company's biggest customer increased, Cirrus said in a letter to shareholders on Thursday.
However, the company said it was trying to diversify its customer base and these efforts were paying off in the company's audio product line, and it was now shipping to several mobile phone manufacturers. (r.reuters.com/ted55t)
Cirrus said the win at the tier 1 handset maker -- which will see its chips integrated into the design of a new mobile device -- could be meaningful for the company, but declined to provide details.
"Obviously it is not going to completely diversify the company overnight, but it is a good step in the right direction," Chief Executive Jason Rhode said on a conference call with analysts.
Net income in the third quarter rose to $67.9 million, or 99 cents per share, in the third quarter from $16.7 million, or 25 cents per share, a year earlier. Excluding items, Cirrus earned $1.64 per share.
Revenue more than doubled to $310 million.
Analysts expected an adjusted profit of $1.41 per share, on revenue of $286 million.
However, the company forecast fourth-quarter revenue below expectations.
It expects revenue of between $200 million and $220 million in the period, compared with analysts' average estimates of $234.9 million, according to Thomson Reuters I/B/E/S.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Joyjeet Das and Anthony Kurian)
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