Cirrus Logic, Inc. (CRUS - Get Report) tumbled 5.42% to $36.58 in early trading Tuesday after the semiconductor company slashed its third-quarter revenue estimates "due to recent weakness in the smartphone market."
The Austin, Texas-based Apple Inc. (AAPL - Get Report) -supplier said it now expects revenue to be in the range of $300 million and $340 million, compared to its previous forecast of between $360 million and $400 million.
In light of the reduced forecast, Susquehanna International Group analyst Christopher Rolland lowered his price target on shares of Cirrus Logic to $43 from $48. In a note to shareholders, Rolland said the 16% revenue reduction "was a bit worse than we had expected."
"Helping to mitigate bottom-line impacts," Rolland said in a note to shareholders, "the company did lower (operational expenditure) guidance modestly, a lever they have previously been reluctant to pull. Given the precipitous decline in revenue over the past few years, we hope they revisit longer-term plans to ramp opex year-over-year."
Cirrus Logic, which makes audio chips used in the iPhone, reported generating about 81% of its revenue from sales to Apple in fiscal 2018 in its most recent 10-K filing.
Rolland said Cirrus Logic's shares fell 14% on Nov. 12, the same day fiber-optic component maker Lumentum Holdings Inc. (LITE - Get Report) reduced its fiscal second-quarter revenue and earnings outlook because one of its top industrial and consumer customers, believed to be Apple, requested a material reduction in shipments of laser diodes for 3D sensing technologies.