When Apple Inc. forecasts higher sales, that usually bodes well for Cirrus Logic.
That’s because the Austin chipmaker supplies audio and voice chips for Apple’s iPhone. Apple on Tuesday reported better-than-expected sales and profit, and forecast higher sales for the next quarter, an indication that it plans to release a new iPhone in September.
But investors mostly shrugged at Cirrus Logic’s quarterly financial report on Wednesday, sending its stock down 3 percent in after-hours trading.
Cirrus Logic’s sales were in line with analyst expectations, and its profit was higher than analysts thought the company would report.
The company reported revenue of $320.7 million, up 24 percent from the year before.
For the current quarter, the company is projecting between $390 million and $430 million in sales, largely due to expected demand for new iPhones.
Though the company never publicly states it, Apple is Cirrus Logic’s biggest customer and accounted for 76 percent of its sales in the company’s first fiscal-year quarter. “Our relationship with our largest customer remains outstanding with design activity continuing on various products,” CEO and President Jason Rhode wrote in the shareholder’s letter. Its other customers include Motorola, Samsung and Sony.
Cirrus Logic develops low-power voice and audio chips not only for smartphones, but also for tablets and digital headphones. Rhode noted in his letter that the company is also working on products for smart home devices and voice biometrics, though “meaningful revenue” from those projects is still years away.
Cirrus Logic executives say they think the transition from analog to digital headsets bodes well for the company.
“The transition of the more than one-billion-unit analog headset market to digitally connected products continues to gain momentum as (manufacturers) push to innovate beyond mobile phones,” Rhode said in the shareholder’s letter.
He said the company is “actively working” on designs with customers “across all headset form factors,” including wire and wireless. And during a conference call with analysts, Rhode said they were targeting premium headphone products and customers.
The company reported profit of $42.9 million, or 64 cents a share. But when adjusted for certain one-time costs and gains, the company reported $54.6 million, or 88 cents a share, which is significantly better than analysts were expecting.
The company employs about 1,450 people worldwide, with more than 600 in Austin.
Cirrus Logic's shares closed Wednesday at $63.37, a slight increase from day before. The company’s stock is up 10 percent since the start of the year.