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Will Lower Revenues Affect Qorvo's (QRVO) Earnings in Q2?

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Qorvo, Inc. (QRVO - Free Report) is scheduled to report second-quarter fiscal 2023 results on Nov 2, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 6.1%. It pulled off a trailing four-quarter earnings surprise of 6.5%, on average.

The Greensboro, NC-based company is expected to have recorded year-over-year lower revenues due to the challenging macroeconomic environment.

Factors at Play

During the quarter, Qorvo launched the highest gain 100-watt L-band compact solution, an innovative GaN-on-SiC power amplifier module, which will be used in commercial and defense radar applications. The QPA2511 GaN-on-Sic Power Amplifier Module has been integrated into a robust surface mount package to simplify broad assembly, testing and system design. This will improve its reliability quotient and accelerate time to market alongside fine-tuning customer manufacturing cycles.  

Qorvo also introduced the QPD1034, a 1700 watt high power RF Gallium Nitride pallet, which addresses a growing need for modular, scalable, reliable and fully tested high-power RF products to support avionics applications, including air traffic control radar. Such state-of-the-art products are likely to have aided its performance in the quarter.

However, macroeconomic woes, dollar strength and high concentration risks are likely to have eroded margins. Qorvo operates in a competitive landscape that is becoming more complex with low barriers to entry. As each player strives to win designs to have a greater pie in the market, the battle gets murkier. The competitive landscape that is becoming more complex with low barriers to entry is likely to have affected its top line in the fiscal second quarter.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,135 million, which indicates a decline from the year-ago quarter’s reported figure of $1,255 million. The consensus estimate for adjusted earnings per share is pegged at $2.55, suggesting a decline from $3.42 recorded in the year-ago quarter.

Earnings Whispers

Our proven model does not predict an earnings beat for Qorvo for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $2.55. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Qorvo, Inc. Price and EPS Surprise

Qorvo, Inc. Price and EPS Surprise

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

Zacks Rank: Qorvo has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Unity Software Inc. (U - Free Report) is set to release quarterly numbers on Nov 9. It has an Earnings ESP of +18.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for United States Cellular Corporation (USM - Free Report) is +47.46% and it sports a Zacks Rank of 1. The company is set to report quarterly numbers on Nov 3.

The Earnings ESP for CDW Corporation (CDW - Free Report) is +0.31% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov 2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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