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Cirrus Logic Beats, But Apple iPhone Slump Dings Skyworks, Qorvo

Cirrus Logic ( CRUS ) stock dodged Apple ’s ( AAPL ) tornado Wednesday, while shares of Apple suppliers Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ) fell on Apple’s first ever year-over-year decline in iPhone sales. In midday trading on the stock market today , Cirrus Logic stock bounded 6.5%, near 36, after the chipmaker late Tuesday posted fiscal Q4 metrics that declined vs. the year-earlier quarter but still topped Wall Street expectations. The results were similar to fellow Apple supplier NXP Semiconductors ( NXPI ), which late Monday reported consensus-topping Q1 earnings that also fell year over year. Cirrus Logic’s current-quarter guidance lagged analyst consensus on softening iPhone sales . Late Tuesday, Apple said that it had shipped 51.19 million iPhones in the March quarter, down 16% from the year-earlier quarter. Needham analyst Rajvindra Gill cut estimates on Apple suppliers Skyworks and Qorvo ahead of their earnings reports, slated for after the market close Wednesday. Apple’s June-quarter revenue guide for $41 million to $43 million implies 38 million iPhone shipments, Gill wrote in a research report. Analyst consensus currently estimates 44 million iPhone shipments for the June quarter, he wrote. “While we expect iPhone unit shipments to grow seasonally beyond the June quarter, we believe overall shipment levels are likely to be below our prior estimates,” he wrote. He cut his price targets on Skyworks and Qorvo stocks to 70 and 50 from 77 and 54, respectively, but kept his buy ratings. But Gil retained his buy rating and 50 price target on Cirrus Logic stock. Massive Opportunity Outside Apple Cirrus Logic reported $232 million in sales for the quarter that ended March 26 and 38 cents earnings per share ex items, down a respective 9% and 42% vs. the year-earlier quarter. The consensus of nine analysts polled by Thomson Reuters called for $226.2 million and 21 cents. Cirrus Logic wrapped up fiscal 2016 with $1.2 billion in sales and $2.40 EPS minus items, topping Wall Street for $1.16 billion and $2.22. Sales climbed 31% but EPS fell 10%. On a year-over-year basis, portable audio product sales — which would include mobile — fell 11% in fiscal Q4 but rose 34% in fiscal 2016. For the current quarter, Cirrus Logic expects $220 million to $250 million in sales, which at the midpoint would be down 17% and missing expectations for $258 million. But Cirrus Logic is gaining content at Apple, “thus insulating it from potential unit shipment declines,” Gill wrote. Outside Apple, he estimates that Cirrus Logic’s total addressable digital solutions market could reach $420 million over the next four years, up from just $21 million. Besides Skyworks and Qorvo, fellow Apple supplier Texas Instruments ( TXN ) is also slated to post financials late Wednesday. Shares for the three companies were down a respective 1.5%, 2% and fraction midday Wednesday. For fiscal Q2, the consensus of 25 analysts expects Skyworks to report $775.6 million in sales and $1.24 EPS minus items, up a respective 2% and 8% year over year. Wall Street calls for Qorvo to report $600 million in sales and 92 cents EPS minus items for its fiscal Q4, and $2.6 billion and $4.26 for its fiscal 2016. Across the board, every metric would fall vs. the year-earlier period. Texas Instruments is expected to wrap Q1 with $2.98 billion in sales and 62 cents EPS, down 5% and up 2%, respectively.

Low-Cost iPhone SE Could Dent Apple’s Profit Margins

Apple ‘s ( AAPL ) new iPhone SE probably has a gross profit margin of about 35% for the entry-level model, which is well below the mid-40% margins enjoyed by the rest of the iPhone family, RBC Capital Markets said in a research report Thursday. But the new phone, which starts at $399, will still give a lift to revenue and profit, RBC analyst Amit Daryanani said in the report. The iPhone SE could provide $6.8 billion in revenue and 23 cents in earnings per share this calendar year, assuming Apple sells an incremental 15 million units, Daryanani said. He reiterated his outperform rating on Apple stock, with a price target of 130. Apple was down a fraction, below 109, in morning trading on the stock market today . Based on teardown reports, the 16-gigabyte model iPhone SE has a bill of materials cost of about $260, Daryanani said. The 4-inch iPhone uses many of the same components found in the larger-screen, higher-priced iPhone 6 and 6S series phones. The iPhone SE likely benefited from cheaper components that were the result of Apple suppliers left with excess inventory after the iPhone 6S underperformed, he said. Chipmakers Qualcomm ( QCOM ) and Qorvo ( QRVO ) topped content in the iPhone SE, but Skyworks Solutions ( SWKS ) and Texas Instruments ( TXN ) gained new chips in the refreshed 4-inch smartphone, a Chipworks teardown found . The iPhone SE went on sale Thursday. It was a low-key product launch for Apple, with few stores seeing lines forming outside, Piper Jaffray analyst Gene Munster said in a report Thursday. Also, a check of 100 Apple stores in the U.S. found 90% availability for the iPhone SE, he said. “We view both the lack of lines and the high level of product availability as in line with expectations, reinforcing our view that the SE will be largely incremental to the model in replacing the low-end iPhone 5S,” Munster said. RELATED: Middle-Aged Apple Might Get A Sports Car, New Girlfriend .

Apple iPhone SE Teardown: Qualcomm, Qorvo Lead But Skyworks Gains

Chipmakers Qualcomm ( QCOM ) and Qorvo ( QRVO ) topped content in Apple ’s ( AAPL ) newly launched iPhone SE, but Skyworks Solutions ( SWKS ) and Texas Instruments ( TXN ) gained new chips in the 4-inch smartphone, a Chipworks teardown found Thursday. Apple’s iPhone SE is “the most powerful 4-inch phone ever,” the smartphone giant says. It was unveiled March 21 and began shipping today, the same day Tesla Motors ( TSLA ) began taking orders for its less expensive Model 3 . Researchers with Chipworks and iFixit classified the iPhone SE, the first to not have a number in its name, as the iPhone 6S squeezed into the iPhone 5S body. “There are very few new parts, but that hardly means there is no innovation,” Chipworks wrote. But Apple engaged in “serious economical re-use” of many radio-frequency (RF) chips, excepting the Skyworks and Texas Instruments additions. New to the iPhone SE, Skyworks gained a power amplifier module and Texas Instruments earned a power management chip. Privately-held Toshiba and Epcos made new appearances with a flash-memory chip and an antenna switch module. A new power management chip could also be an Apple-Dialog Semiconductor mash-up, Chipworks wrote. Qualcomm and Qorvo each have four chips in the phone, leading Skyworks, which contributed three iPhone SE chips. Broadcom ( AVGO ) and Cirrus Logic ( CRUS ) each supplied two chips. Texas Instruments, NXP Semiconductor ( NXPI ) and InvenSense ( INVN ) all brought one apiece to the table. The A9 processor was supplied by Taiwan Semiconductor Manufacturing ( TSM ), in this particular phone. But Apple dual-sourced the A9 in the iPhone 6S, splitting share between Taiwan Semiconductor and Samsung. Samsung reportedly has since said that it would yield the A10 processor to Taiwan Semiconductor. The A10 processor is scheduled to make its debut in the iPhone 7, likely to be launched in September.