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Qorvo (QRVO) Beats Q4 Earnings Estimates on Top-Line Growth
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Premier semiconductor manufacturer Qorvo, Inc. (QRVO - Free Report) reported solid fourth-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 $212.3 million or $1.95 per share compared with $298.7 million or $2.60 per share in the prior-year period. Despite top-line growth, the year-over-year decrease in earnings was primarily attributable to higher operating expenses due to fresh COVID-19 lockdown restrictions in China, raw material price volatility and supply chain disruptions owing to the Russia-Ukraine war. In fiscal 2022, GAAP net income surged to $1,033.4 million or $9.26 per share from $733.6 million or $6.32 per share in fiscal 2021.
Non-GAAP earnings in the reported quarter were $339.6 million or $3.12 per share, up from $315.4 million or $2.74 per share in the year-ago quarter. The bottom line exceeded management’s guidance and beat the Zacks Consensus Estimate of $2.94.
Non-GAAP revenues improved to $1,166.2 million from $1,072.7 million in the year-ago quarter. The year-over-year increase in revenues was driven by broad-based demand across markets, the fast pace of 5G deployment, customer smartphone ramp up and growth in Infrastructure and Defense products. Revenues beat the Zacks Consensus Estimate of $1,150 million. For fiscal 2022, revenues improved to $4,645.7 million from $4,015.3 million in fiscal 2021.
Non-GAAP gross margin was 52% compared with 52.6% in the year-ago quarter. Non-GAAP income from operations was $377.2 million, up from $357.2 million.
Balance Sheet
At fiscal 2022-end, cash and cash equivalents were $972.6 million, while long-term debt was $2,047.1 million compared with respective tallies of $1,397.9 million and $1,742.6 million in the prior year. Free cash flow at the end of the quarter was $295.4 million.
Outlook
For first-quarter fiscal 2023, Qorvo expects revenues to be in the range of $1–$1.05 billion, given a healthy demand schedule backed by an expanding market and customer exposure and a deep product and technical portfolio. The company expects a non-GAAP gross margin of approximately 50% and non-GAAP earnings in the range of $2.00-$2.25 per share.
Viavi delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 8.2% since May 2021, while that for the next year is up 11.6%. 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. It expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
KVH Industries, Inc. (KVHI - Free Report) , a Zacks Rank #2 stock, delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be room for cash flow expansion.
Spirent Communications plc (SPMYY - Free Report) carries a Zacks Rank #2. Earnings estimates for the current year for the stock have moved up 9.2% since May 2021, while that for the next year is up 10.3%.
Founded in 1936 and headquartered in Crawley, the United Kingdom, Spirent offers a comprehensive, end-to-end solution that validates forwarding performance, latency and functional capabilities in an integrated approach that reduces cost of ownership. It is a leading provider of Ethernet validation solutions in the market.
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Qorvo (QRVO) Beats Q4 Earnings Estimates on Top-Line Growth
Premier semiconductor manufacturer Qorvo, Inc. (QRVO - Free Report) reported solid fourth-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 $212.3 million or $1.95 per share compared with $298.7 million or $2.60 per share in the prior-year period. Despite top-line growth, the year-over-year decrease in earnings was primarily attributable to higher operating expenses due to fresh COVID-19 lockdown restrictions in China, raw material price volatility and supply chain disruptions owing to the Russia-Ukraine war. In fiscal 2022, GAAP net income surged to $1,033.4 million or $9.26 per share from $733.6 million or $6.32 per share in fiscal 2021.
Non-GAAP earnings in the reported quarter were $339.6 million or $3.12 per share, up from $315.4 million or $2.74 per share in the year-ago quarter. The bottom line exceeded management’s guidance and beat the Zacks Consensus Estimate of $2.94.
Qorvo, Inc. Price, Consensus and EPS Surprise
Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote
Quarter Details
Non-GAAP revenues improved to $1,166.2 million from $1,072.7 million in the year-ago quarter. The year-over-year increase in revenues was driven by broad-based demand across markets, the fast pace of 5G deployment, customer smartphone ramp up and growth in Infrastructure and Defense products. Revenues beat the Zacks Consensus Estimate of $1,150 million. For fiscal 2022, revenues improved to $4,645.7 million from $4,015.3 million in fiscal 2021.
Non-GAAP gross margin was 52% compared with 52.6% in the year-ago quarter. Non-GAAP income from operations was $377.2 million, up from $357.2 million.
Balance Sheet
At fiscal 2022-end, cash and cash equivalents were $972.6 million, while long-term debt was $2,047.1 million compared with respective tallies of $1,397.9 million and $1,742.6 million in the prior year. Free cash flow at the end of the quarter was $295.4 million.
Outlook
For first-quarter fiscal 2023, Qorvo expects revenues to be in the range of $1–$1.05 billion, given a healthy demand schedule backed by an expanding market and customer exposure and a deep product and technical portfolio. The company expects a non-GAAP gross margin of approximately 50% and non-GAAP earnings in the range of $2.00-$2.25 per share.
Zacks Rank & Stocks to Consider
Qorvo currently has a Zacks Rank #4 (Sell).
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors in the broader industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Viavi delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 8.2% since May 2021, while that for the next year is up 11.6%. 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. It expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
KVH Industries, Inc. (KVHI - Free Report) , a Zacks Rank #2 stock, delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be room for cash flow expansion.
Spirent Communications plc (SPMYY - Free Report) carries a Zacks Rank #2. Earnings estimates for the current year for the stock have moved up 9.2% since May 2021, while that for the next year is up 10.3%.
Founded in 1936 and headquartered in Crawley, the United Kingdom, Spirent offers a comprehensive, end-to-end solution that validates forwarding performance, latency and functional capabilities in an integrated approach that reduces cost of ownership. It is a leading provider of Ethernet validation solutions in the market.