Cirrus Logic shares tumble on weak guidance
NEW YORK (AP) — Shares of Cirrus Logic Inc. tumbled Wednesday after the chipmaker forecast lower-than-expected fiscal fourth-quarter revenue.
THE SPARK: Cirrus said late Tuesday that it expects revenue for the quarter ended March 30 to be about $206.9 million. Analysts, on average, expected $209.8 million, according to FactSet.
The company also projected fiscal first-quarter revenue of $150 million to $170 million, below analysts' predictions of $190.9 million.
THE BIG PICTURE: Austin, Texas-based Cirrus makes chips used in audio and energy products. The company's stock has tumbled to nearly half of its value in the months since it reported its fiscal second-quarter results in late October.
Cirrus also said Tuesday that higher-than-expected inventories of some products will mean lower-than-expected profitability for the quarter. But the company thinks profitability will return to previously projected levels in the fiscal first quarter of this year.
THE ANALYSIS: Stifel Nicolaus analyst Tore Svanberg said that while he was a little surprised by the timing of the news, the announcement could actually help the company grow by resetting investor expectations. He kept a "Buy" rating on the stock.
THE SHARES: Down $2.88, or 13.5 percent, to $18.53 in morning trading after dropping as low as $18.33 earlier in the session to a new 52-week low amid a broader market sell-off..