Cirrus Logic, Inc. CRUS is scheduled to report first-quarter fiscal 2019 results on Aug 1. The company beat estimates twice in the trailing four quarters, delivering an average positive surprise of 3.32%.
However, in the last reported quarter, it came up with a negative earnings surprise of 13.56%. Reduced revenues and higher operating expenses were the main reason behind the dismal bottom-line results.
Let's see how things are shaping up for the upcoming announcement.
Cirrus Logic, Inc. Price and EPS Surprise
Cirrus Logic, Inc. Price and EPS Surprise | Cirrus Logic, Inc. Quote
Factors at Play
Cirrus Logic’s focus on execution, expansion of its customer base and efforts to capitalize on rising demand for powerful audio and voice components is expected to show results in the to-be reported quarter.
Moreover, the company’s strengthening product portfolio, aiming a variety of smart home applications, digital headsets and smartphones, is a positive. Audio amplifier design wins along with lead design win with first generation haptic products and discussions in progress with customers for second generation products are encouraging.
The company’s efforts in voice biometrics are likely to boost results as the technology continues to gain traction in various markets especially banking and financial services.
Nonetheless, according to the company’s most recently filed annual report, 81% of revenues came from sales to Apple AAPL. Given the seasonally slow quarter for Apple, consumers are likely to postpone purchases, due to the upcoming product refresh cycle. This might have an impact on Cirrus Logic as well, given its heavy dependence on Apple.
Moreover, owing to the ongoing sluggishness in the smartphone market, the company had provided a tepid outlook for the first quarter of fiscal 2019 Given the slowdown in China, the global smartphone market remained affected in the fiscal first quarter as well. Hence, the top-line is likely to stay under pressure.
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Cirrus Logic has a Zacks Rank #3 and an Earnings ESP of +33.33%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Turtle Beach Corporation HEAR with an Earnings ESP of +57.14%, and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp, Inc. NTAP with an Earnings ESP of +1.12% and a Zacks Rank #2.
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