Chipmaker Cirrus Logic Surges On Earnings; Cree Tumbles

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Upbeat earnings reports from chipmakers Cirrus Logic (CRUS), Mellanox Technologies (MLNX) and Qorvo (QRVO) weren't enough to broadly boost semiconductor stocks on Thursday.

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The Philadelphia semiconductor index, known as SOX, fell 1% in midday trading Thursday.

Cirrus Logic stock jumped 5.5%, near 86.05, in late morning trading on the stock market today. Mellanox climbed 1.5%, near 121.05. Qorvo dipped 0.3%, near 112.20. All three chipmakers posted better-than-expected December-quarter results late Wednesday.

Meanwhile, chipmaker Cree (CREE) tumbled 8.4%, near 46.40, after delivering a disappointing quarterly report.

Semiconductor Stocks: Cirrus Logic Stock Rocks

Austin, Texas-based Cirrus Logic earned an adjusted $1.41 a share on sales of $374.7 million in its fiscal third quarter ended Dec. 28. Analysts expected it to earn $1.14 a share on sales of $345 million.

On a year-over-year basis, Cirrus Logic earnings rose 55% while sales climbed 16%. It was the company's third straight quarter of accelerating earnings growth.

Cirrus Logic credited resurgent smartphone production for its quarterly beat. Cirrus Logic is a major supplier of audio chips for Apple (AAPL) iPhones and wearables. On Tuesday, Apple reported robust holiday sales of its iPhone 11 series smartphones. Cirrus Logic gets about 80% of its revenue from Apple.

For the March quarter, it guided to sales of $270 million, topping analyst estimates of $245 million.

Cirrus Logic ranks No. 5 out of 31 semiconductor stocks in IBD's fabless chipmaker industry group, according to the IBD Stock Checkup tool.

Qorvo Benefiting From 5G Wireless Rollout

Greensboro, N.C.-based Qorvo earned an adjusted $1.86 a share on sales of $869.1 million in its fiscal third quarter ended Dec. 28. Analysts expected Qorvo earnings of $1.68 a share on sales of $852.6 million. On a year-over-year basis, Qorvo earnings rose 1% while sales climbed 4%.

Qorvo makes radio-frequency chips for wireless communications. It is getting a lift from the rollout of 5G wireless technology.

For the current quarter, Qorvo expects to earn an adjusted $1.55 a share on sales of $820 million. That's based on the midpoint of its outlook. Wall Street was modeling Qorvo earnings of $1.15 a share on sales of $726 million.

Mellanox Reports Accelerating Sales, Earnings Growth

Mellanox earned $2.31 a share on sales of $379.8 million in the fourth quarter. Analysts expected Mellanox earnings of $1.70 a share on sales of $333.3 million. On a year-over-year basis, Mellanox earnings rose 63% while sales jumped 31%. It marked the second consecutive quarter of accelerating sales and earnings growth.

Graphics-chip maker Nvidia (NVDA) is in the process of acquiring Mellanox. Nvidia announced its $6.9 billion purchase of Mellanox in March 2019.

Among semiconductor stocks in IBD's fabless chipmaker industry group, Mellanox is tied for first place with Advanced Micro Devices (AMD).

Cree Delivers Mixed December-Quarter Report

Durham, N.C.-based Cree lost an adjusted 10 cents a share on sales of $239.9 million in its fiscal second quarter ended Dec. 29. Analysts expected it to lose 10 cents a share on sales of $236.3 million. In the year-earlier quarter, it earned 21 cents a share on sales of $280.5 million.

For the current quarter, it expects to lose an adjusted 12 cents a share on sales of $225 million. That's based on the midpoint of its guidance. Wall Street was modeling Cree to lose 7 cents a share on sales of $237.9 million in the March quarter.

Cree said its sales forecast was negatively impacted by factory closures in China related to the coronavirus outbreak.

Cree ranks No. 21 out of 32 semiconductor stocks in IBD's Semiconductor Manufacturing industry group. It has a poor IBD Composite Rating of 31, according to the IBD Stock Checkup.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor companies.

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The post Chipmaker Cirrus Logic Surges On Earnings; Cree Tumbles appeared first on Investor's Business Daily.

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