With another quarter for Cirrus Logic (CRUS) in the books, now is the time to review the business and investment case for the company. The company reported earnings Thursday of 22c/sh., below already reduced expectations of 24c/sh. Although revenue was up 46% y/y and earnings were up 37% y/y, guidance for next quarter was also below expectations at $88-$94 million versus an expected $99 million.
The business: The company has been around since 1981 and has been doing business with Apple on and off since at least 1993. Cirrus has two main product lines Audio (73%) & Energy (27%). Their DSP's (digital signal processor) go into Apple products like the iPhone, iPad, and Macs. They have an audio codec in the Ford Sync system, provide custom chips for all Itron power meters, and make seismic sensors among other product lines. In the future, the company looks to their new low power 3mW (milliwatt) DSP to win new tablet and headset business this year—and for their LED lighting controller with superior dimming technology to achieve new revenue the following year. Cirrus identifies their LED chip to be their best chance for significant diversification away from Apple. [more]
While it is not clear yet that Greece will have to accept the European/IMF bailout crafted by Germany and France, I thought it would be worthwhile to revisit some previous cases of IMF assistance to see how that turned out for the borrowing countries. Not really being too familiar with IMF history, I discovered some interesting things. However, if you are already familiar with IMF history and previous recipients, keep moving. [more]
About a week before Facet Biotech (FACT) was acquired by Abbot Labs (ABT) for a 70% premium, I stumbled across the company and considered buying shares. I saw that they had almost $300 million in cash and a market cap of only about 414 million. However, I then made the “mistake” of looking at their earnings and saw -$5.92/share. Immediately, I quit researching the company reasoning even $13/share in cash doesn’t last very long when you’re losing almost half that in a year. [more]