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Qorvo (QRVO) Beats Q3 Earnings Estimates on Higher Revenues

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Premier semiconductor manufacturer Qorvo, Inc. (QRVO - Free Report) reported solid third-quarter fiscal 2022 results driven by secular growth drivers in 5G, IoT connectivity, defense and power. Both the bottom line and the top line surpassed the respective Zacks Consensus Estimate, backed by the strength of the business model and expansion of its regional footprint.

Net Income

GAAP net income in the reported quarter was $216.3 million or $1.95 per share compared with $201 million or $1.74 per share in the prior-year period. Despite higher operating expenses, the year-over-year increase in earnings was primarily attributable to top-line growth.

Non-GAAP earnings in the reported quarter were $330.4 million or $2.98 per share, down from $356.7 million or $3.08 per share in the year-ago quarter. The bottom line exceeded management’s guidance and beat the Zacks Consensus Estimate by 22 cents.

Qorvo, Inc. Price, Consensus and EPS Surprise Qorvo, Inc. Price, Consensus and EPS Surprise

Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote

Quarter Details

Non-GAAP revenues improved to $1,114 million from $1,094.8 million in the year-ago quarter. The year-over-year increase in revenues was driven by broad-based demand across markets, customer smartphone ramp up and growth in Infrastructure and Defense products (IDP). Revenues beat the Zacks Consensus Estimate of $1,107 million.

By segment, Mobile Products revenues were $848 million due to the launch of a number of premium smartphones and higher flagship volume. Revenues from IDP were $266 million with healthy demand from infrastructure and programmable power management tools. Qorvo continues to reposition its IDP product portfolio to support high-growth markets.

Non-GAAP gross margin was 52.6% compared with 54.4% in the year-ago quarter. Non-GAAP income from operations was $372 million, down from $401.4 million.

Balance Sheet & Cash Flow

At quarter-end, cash and cash equivalents were $988.5 million, while long-term debt was $2,046.9 million. Net cash provided by operating activities was $117 million with free cash flow of $66.5 million at the end of the quarter.

Outlook

Qorvo expects revenues in fourth-quarter fiscal 2022 to be $1,135–$1,165 million, given a healthy demand schedule. The company expects a non-GAAP gross margin of approximately 52% and non-GAAP earnings in the vicinity of $2.94 per share.

Zacks Rank & Stocks to Consider

Qorvo currently has a Zacks Rank #3 (Hold).

Clearfield, Inc. (CLFD - Free Report) , sporting a Zacks Rank #1 (Strong Buy) is a solid pick for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered an earnings surprise of 50.7%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 102.7% since February 2021. Over the past year, Clearfield has gained a solid 85.8%.

Vocera Communications, Inc. sports a Zacks Rank #1. It has a long-term earnings growth expectation of 18% and delivered a stellar earnings surprise of 109.6%, on average, in the trailing four quarters.

Over the past year, Vocera has gained 81.7%. It offers an all-inclusive digital platform for hands-free communication via secure text messaging, alert and alarm management. Leveraging a patent-protected, enterprise-class server software, Vocera provides an advanced clinical rules engine that simultaneously unifies data from multiple sources, prioritizes notifications and sends messages to the right care team members. This, in turn, augments clinical workflow by enabling the interoperability of the solution with a significant number of clinical and operational systems used in hospitals today.

Viavi Solutions Inc. (VIAV - Free Report) carries a Zacks Rank #2 (Buy). It delivered a modest earnings surprise of 14.3%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 3.7% since February 2021, while that for the next year is up 7.3%.

Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. The healthy growth traction is further demonstrated by the upside in wireless & fiber test, 3D sensing products, optical transport, Ethernet, broadband access, video test and storage network testing markets. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.


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