This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Can Audience Block Out the Doubters?

Stocks in this article: ADNC AAPL QCOM GOOG

NEW YORK ( TheStreet) -- It's been two months since Apple (AAPL) sent chilling waves through Audience (ADNC) and its investors.

Audience, which specializes in noise suppression technology, had long been a staple in previous iterations Apple's iPhones. But Audience suspected it had been left off the new iPhone 5 when the company realized it had not been involved in the typical pre-launch discussions.

Peter Santos, CEO of Audience, didn't wait for confirmation and opted to informed investors about the possibility Apple would not extend their relationship, even though Apple had not yet confirmed this.

On the announcement, shares of Audience lost over 60% of their value, and dropped as low as $5.51 -- a decline of 80% from its 52-week high.

This event was a testament to the dangers that exist when one company, in this case Apple, represents a significant portion of your revenue. On the heels of the company's recent earnings report, I was looking for confirmation Audience can sustain growth without Apple.

A Good Third Quarter, But...

Audience reported net income of $4.9 million, or 21 cents per share, on revenue of $40.8 million. Earnings per share grew 60% year-over-year -- exceeding the $2.7 million in net income Audience earned in the third quarter of 2011.

While that might look impressive, it is worth noting the company had significantly fewer shares outstanding at this point in 2011 -- 3.8 million shares compared to 23.2 million today.

However, that revenue showed 55% year-over-year growth is pretty remarkable. Equally impressive was that sales grew by 22% from the second quarter. Likewise, margins were solid -- improving eight points year over year.

In terms of outlook for the fourth quarter, Audience expects net income, which includes stock-based compensation as well as expenses, of $800,000 to $1.7 million, or 4 cents to 8 cents per share, on revenue as high as $38 million. Margins are projected to come in at negative five points to flat.

Moving Forward

Although guidance was unimpressive, the company deserves a considerable amount of credit for its third-quarter performance, particularly as this was its first full quarter as a public company. Growth indicators were positive and the company is now in the midst of expansion into markets such as China.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs