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Qorvo stock jumps 5% on strong results and guidance

Published 01/31/2024, 04:22 PM
Updated 02/01/2024, 05:19 AM
© Reuters.  Qorvo (QRVO) stock jumps on strong results and guidance
(Updated - February 1, 2024 5:17 AM EST)

Shares of Qorvo (NASDAQ:QRVO) reported better-than-expected earnings and revenue for the third quarter, sending the company’s shares up 5.3% in pre-market Thursday trading.

The semiconductor solutions provider posted Q3 earnings per share (EPS) of $2.10, topping the consensus estimates of $1.66. Revenue came in at $1.07 billion, while analysts were looking for $1 billion.

Qorvo reported a non-GAAP gross margin of 43.8% for the period and an operating income of $237 million.

Looking ahead, the company expects Q4 EPS to be around $1.20, ahead of Wall Street’s estimates of $1.15. Revenue is anticipated to hit $925 million in that quarter, compared to $914.1 million projected by analysts.

Moreover, Qorvo also announced it has reached an agreement to acquire Anokiwave, a supplier of high-performance silicon integrated circuits (ICs). The transaction is expected to close during the March quarter.

“Anokiwave’s high-frequency beamforming and intermediate frequency (IF) to RF conversion ICs are a strong complement to Qorvo’s RF front-end portfolio,” said Philip Chesley, president of Qorvo’s High Performance Analog segment.

“The combination of our unique capabilities will enable us to supply highly integrated complete solutions and SiPs for defense, aerospace and network infrastructure applications.”

Wolfe Research analysts reiterated an Outperform rating as they see "potential upside to earnings from iPhone content, normalization of the non-handset businesses, and margin improvement driven by improving utilization and mix."

Morgan Stanley analysts also reflected positively on Qorvo's earnings.

"Qorvo continues to execute in a mixed smartphone market, with optimism around continued content gains, sustaining the higher level of China smartphone, and recovering gross margin as it burns down inventory; remain OW," analysts wrote in a report.

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