Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Qorvo (QRVO) Q2 Earnings & Revenues Beat Estimates, Down Y/Y

By Zacks Investment ResearchStock MarketsOct 31, 2019 10:18PM ET
www.investing.com/analysis/qorvo-qrvo-q2-earnings--revenues-beat-estimates-down-yy-200481461
Qorvo (QRVO) Q2 Earnings & Revenues Beat Estimates, Down Y/Y
By Zacks Investment Research   |  Oct 31, 2019 10:18PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
VG
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSM
-1.57%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
QRVO
+0.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HPE
-0.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Qorvo Inc. (NASDAQ:QRVO) reported second-quarter fiscal 2020 non-GAAP earnings of $1.52 per share, surpassing the Zacks Consensus Estimate of $1.30 per share. However, reported earnings decreased from $1.75 per share reported in the year-ago quarter.

Revenues on a non-GAAP basis declined 8.8% year over year to $806.7 million. However, the figure was higher than management’s guidance of $745 million and 765 million. Further, the top line outpaced the Zacks Consensus Estimate of $754 million.

The results can be attributed to improved progress in IDP and stringent cost control measures. The company benefited from increased demand in the performance-tier for RF Fusion based solutions, antenna tuning, discrete components and BAW-based multiplexers.

Notably, Huawei is one of the more prominent customers of Qorvo. During the reported quarter, sales to Huawei contributed 5% to total revenues.

Shares of Qorvo have returned 33.2% year to date, outperforming the industry’s rally of 32.6%.

Quarter Details

Segment-wise, Mobile Products (MP) revenues were $623 million. The segmental revenues were aided by robust demand from top customers.

Infrastructure and Defense (IDP) revenues were down year over year to $184 million, primarily owing to impacts of export restrictions.

However, robust growth in the company’s wireless connectivity, improvement in base station solutions, ramping up ofWi-Fi 6 and robust 5G infrastructure market demand acted as tailwinds.

Further, strong demand for the company’s solutions in defense (advanced radars and other electronic warfare products) and connectivity (Wi-Fi and emerging IoT applications) and rapid adoption of GaN for high-power applications were also key catalysts.

In the quarter under review, Qorvo completed the acquisition of Cavendish Kinetics, with an aim to strengthen portfolio of programmable analog and mixed signal power offerings.

Qorvo was also selected by top four China-based smartphone OEMs to offer the latter with antenna tuning, high-band PAD and other integrated solutions for 5G smartphones.

Further, the company increased shipments of 5G massive MIMO infrastructure solutions to various OEMs. The company also secured new design wins across all 5.9GHz 5G frequency bands. The company’s expanding RF product portfolio pertaining to 5G and massive MIMO base stations bodes well in the days ahead.

Notably, Qorvo sampled BAW-based 5G antennaplexer solutions in a bid to aid customers in utilizing antenna architectures for 5G devices.

Accelerating timeline for 5G deployment bodes well for Qorvo. It has participated in dozens of 5G field trials and demonstrations. We believe an expanding portfolio enabling 5G deployment augurs well.

Operational Details

Non-GAAP gross margin contracted 120 bps from the year-ago quarter to 46.5%. This can be attributed to unfavorable product mix.

Non-GAAP operating expenses decreased around 1% year over year and came in at $166.7 million.

Non-GAAP operating margin contacted 380 bps from the year-ago quarter to 24.8%.

Balance Sheet & Cash Flow

As of Sep 28, 2019, cash and cash equivalents were $586.8 million compared with $629.6 million reported in the previous quarter. Long-term debt was $1.02 billion relatively flat quarter over quarter.

Net cash provided by operating activities was $173 million, down from $257 million in the previous quarter. Free cash flow during the reported quarter came in at $135 million.

During the quarter under review, the company repurchased shares worth $165 million under the share repurchase program. The company also announced the authorization of a new $1 billion under the share repurchase program.

Guidance

For third-quarter fiscal 2020, Qorvo anticipates revenues between $840 million and $860 million. Earnings are projected to be $1.67 per share at the mid-point. The Zacks Consensus Estimate for revenues and earnings are pegged at $766.2 million and $1.35 per share, respectively.

Further, Mobile Products revenues in the third quarter are expected to be up sequentially. IDP revenues are expected to increase year over year and sequentially, primarily owing to robust ramp of Wi-Fi 6 and higher 5G infrastructure customer demand.

Non-GAAP gross margin is anticipated to 48%.

Zacks Rank & Stocks to Consider

Qorvo carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Vonage Holdings Corp. (NYSE:VG) , Hewlett Packard Enterprise Company (NYSE:HPE) and Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) . Each of the stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Vonage, Hewlett Packard Enterprise and Taiwan Semiconductor is currently pegged at 5%, 7.4% and 10.4%, respectively.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.5% per year. So be sure to give these hand-picked 7 your immediate attention.

See them now >>



Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report

Qorvo, Inc. (QRVO): Free Stock Analysis Report

Vonage Holdings Corp. (VG): Free Stock Analysis Report

Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report

Original post

Zacks Investment Research
Qorvo (QRVO) Q2 Earnings & Revenues Beat Estimates, Down Y/Y
 

Related Articles

Qorvo (QRVO) Q2 Earnings & Revenues Beat Estimates, Down Y/Y

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email