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Qorvo's (QRVO) Q1 Adjusted Earnings and Sales Improve Y/Y
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Premier semiconductor manufacturer Qorvo, Inc. (QRVO - Free Report) reported first-quarter fiscal 2017 GAAP net loss of $5.7 million or a loss of 4 cents per share as against net income of $2.0 million or a penny per share in the prior-year period. Despite higher revenues, the year-over-year decrease in earnings was primarily due to higher operating expenses during the quarter.
Non-GAAP earnings in the reported quarter were $143.1 million or $1.08 per share, down from $168.5 million or $1.09 per share in the year-ago quarter. Adjusted earnings (with stock-based compensation adjustments) of 85 cents per share missed the Zacks Consensus Estimate by a penny, although it improved from the year-ago tally of 78 cents.
Quarter Details
Non-GAAP revenues for first-quarter fiscal 2017 improved to $697.6 million from $672.7 million in the year-ago quarter. The year-over-year increase in revenues reflected better-than-expected customer demand due to strength in Mobile products in China, a large customer smartphone ramp and growth in Infrastructure and Defense products (IDP). Revenues beat the Zacks Consensus Estimate of $650 million.
By segment, Mobile Products revenue was approximately flat year over year and increased 18% sequentially to $547 million due to launch of a number of premium smartphones and a strong market demand in China. Revenues from IDP grew 24% year over year and 6% sequentially to $151 million due to design wins and robust customer activity, especially in GaN (gallium nitride) power amplifier. Qorvo continues to reposition its IDP product portfolio to support high growth markets that is forecasted to grow at a CAGR of 17% to $7 billion by 2020.
Fiscal 2017 first-quarter non-GAAP gross margin was 48.2% versus 50.0% in the year-ago quarter, impacted by low-band PAD (power amplifier+duplexer) business. Non-GAAP income from operations was $167.6 million versus $160.6 million in the prior-year quarter.
During the quarter, Qorvo acquired privately-held Netherlands-based GreenPeak Technologies, a leader in ultra-low power, short range RF (radio frequency) communication technology. The acquisition will facilitate Qorvo to expand its customer offering to include highly integrated RF solutions and systems-on-a-chip for the connected home and the rapidly growing Internet of Things (IoT) market.
Qorvo extended its portfolio with a broad range of proprietary antenna products and multiple receiver architecture technologies with the acquisition of GreenPeak. GreenPeak solutions offer superior range, robustness and best-in-class WiFi interference rejection with no latency in production-ready reference designs that allow quick time to market for integration into smart home and IoT applications.
Balance Sheet & Cash Flow
At quarter end, cash and cash equivalents were $433.0 million, while long-term debt was $988.4 million.
Net cash provided by operating activities was $59 million with free cash flow of $76.1 million at the end of the quarter. Capital expenditures were $130 million, primarily due to growing premium filter demand.
Outlook
Qorvo expects non-GAAP revenues in second-quarter fiscal 2017 to be approximately $820–$850 million, given a healthy demand schedule. The company expects gross margin of approximately 47% and earnings within $1.35 and $1.45 per share.
Currently, Qorvo carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Amkor Technology, Inc. (AMKR - Free Report) , Cirrus Logic Inc. (CRUS - Free Report) and FormFactor Inc. (FORM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
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Qorvo's (QRVO) Q1 Adjusted Earnings and Sales Improve Y/Y
Premier semiconductor manufacturer Qorvo, Inc. (QRVO - Free Report) reported first-quarter fiscal 2017 GAAP net loss of $5.7 million or a loss of 4 cents per share as against net income of $2.0 million or a penny per share in the prior-year period. Despite higher revenues, the year-over-year decrease in earnings was primarily due to higher operating expenses during the quarter.
Non-GAAP earnings in the reported quarter were $143.1 million or $1.08 per share, down from $168.5 million or $1.09 per share in the year-ago quarter. Adjusted earnings (with stock-based compensation adjustments) of 85 cents per share missed the Zacks Consensus Estimate by a penny, although it improved from the year-ago tally of 78 cents.
Quarter Details
Non-GAAP revenues for first-quarter fiscal 2017 improved to $697.6 million from $672.7 million in the year-ago quarter. The year-over-year increase in revenues reflected better-than-expected customer demand due to strength in Mobile products in China, a large customer smartphone ramp and growth in Infrastructure and Defense products (IDP). Revenues beat the Zacks Consensus Estimate of $650 million.
By segment, Mobile Products revenue was approximately flat year over year and increased 18% sequentially to $547 million due to launch of a number of premium smartphones and a strong market demand in China. Revenues from IDP grew 24% year over year and 6% sequentially to $151 million due to design wins and robust customer activity, especially in GaN (gallium nitride) power amplifier. Qorvo continues to reposition its IDP product portfolio to support high growth markets that is forecasted to grow at a CAGR of 17% to $7 billion by 2020.
Fiscal 2017 first-quarter non-GAAP gross margin was 48.2% versus 50.0% in the year-ago quarter, impacted by low-band PAD (power amplifier+duplexer) business. Non-GAAP income from operations was $167.6 million versus $160.6 million in the prior-year quarter.
QORVO INC Price, Consensus and EPS Surprise
QORVO INC Price, Consensus and EPS Surprise | QORVO INC Quote
Acquisition
During the quarter, Qorvo acquired privately-held Netherlands-based GreenPeak Technologies, a leader in ultra-low power, short range RF (radio frequency) communication technology. The acquisition will facilitate Qorvo to expand its customer offering to include highly integrated RF solutions and systems-on-a-chip for the connected home and the rapidly growing Internet of Things (IoT) market.
Qorvo extended its portfolio with a broad range of proprietary antenna products and multiple receiver architecture technologies with the acquisition of GreenPeak. GreenPeak solutions offer superior range, robustness and best-in-class WiFi interference rejection with no latency in production-ready reference designs that allow quick time to market for integration into smart home and IoT applications.
Balance Sheet & Cash Flow
At quarter end, cash and cash equivalents were $433.0 million, while long-term debt was $988.4 million.
Net cash provided by operating activities was $59 million with free cash flow of $76.1 million at the end of the quarter. Capital expenditures were $130 million, primarily due to growing premium filter demand.
Outlook
Qorvo expects non-GAAP revenues in second-quarter fiscal 2017 to be approximately $820–$850 million, given a healthy demand schedule. The company expects gross margin of approximately 47% and earnings within $1.35 and $1.45 per share.
Currently, Qorvo carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Amkor Technology, Inc. (AMKR - Free Report) , Cirrus Logic Inc. (CRUS - Free Report) and FormFactor Inc. (FORM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>