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Qorvo, Inc. (QRVO - Free Report) reported healthy third-quarter fiscal 2023 results, with the bottom and the top line surpassing the respective Zacks Consensus Estimate. However, the Greensboro, NC-based company reported year-over-year lower revenues due to weak end-market demand, elevated inventories in the post-pandemic market, underutilization of manufacturing facilities and global uncertainty.
Net Income
GAAP net loss in the reported quarter was $15.9 million or loss of 16 cents against a net income of $216.3 million or $1.95 per share in the prior-year quarter. The sharp bottom-line contraction was attributable to a significant decline in net sales.
Non-GAAP earnings in the reported quarter were $76.5 million or 75 cents per share, down from $330.4 million or $2.98 per share in the year-ago quarter. The bottom line outperformed the Zacks Consensus Estimate by 11 cents despite the year-over-year decline.
Revenues fell to $743.3 million from $1,114 million in the year-ago quarter. However, the top line beat the Zacks Consensus Estimate of $727 million and it was well above the midpoint of management’s guidance. Despite witnessing a solid performance in broadband, automotive, defense and silicon, higher channel inventories in the post-pandemic scenario and a waning end market demand hampered company’s revenues.
Qorvo’s High Power Amplifier (HPA) witnessed a year-over-year decline as revenues amounted to $155 million in the December quarter, down from $182 million in the year-ago quarter. Weakness in the consumer-facing market, like SSDs and inventory consumption in the 5G base station market, stunted growth in defense and silicon carbide power devices
Low demand for WIFI products and inventory consumption also induced a fall in net sales in the company’s Connectivity & Sensors Products Group. Revenue dropped to $97 million from $158 million in the corresponding quarter previous year.
The company witnessed a 36% revenue contraction from the prior-year quarter’s levels in the Advanced Cellular Products Group. Revenues declined from $775 million in the same quarter last year to $491 million this quarter. Record decline in smartphone shipment in the December quarter associated with high inventory hampered Qorvo’s top-line performance in the segment.
Other Details
On a GAAP basis, gross profit totaled $268.1 million compared with $548.1 million in the year-ago quarter. Operating expenses increased to $259.3 million from $252.1 million in the prior-year quarter.
Non-GAAP gross margin was 40.9% compared with 52.6% in the year-ago quarter. Lower factory utilization and higher inventory-related challenges are the primary factors for this reduction. Due to OpEx discipline, the timing of product development expenditure and fewer employee-related expenses, non-GAAP operating expenses in the quarter were $205.7 million, down from $214.2 million in the prior year.
Cash Flow & Liquidity
As of Dec 31, 2022, QRVO had $918.8 million in cash and cash equivalents with $2,047.7 million of long-term debt compared with respective tallies of $972.6 million and $2,047.1 million in the year-ago period. Free cash flow at the end of the December quarter was $203 million, up from the prior year’s figure of 66.5 million.
Outlook
The company anticipates that the smartphone market situation will improve in the March quarter as more customers will enter the market. It experienced a 20% decrease in total channel inventory for its components in the Android ecosystem during the December quarter alone. Management expects supply-demand adjustments will continue further during the next quarter and its business volume will recover later this year.
For fourth-quarter fiscal 2023, Qorvo expects revenues to be $600-$640 million. The company estimates a non-GAAP gross margin of around 41% and non-GAAP earnings in the range of 10-15 cents per share.
Motorola Solutions, Inc. (MSI - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 6.6%, on average, in the trailing four quarters. Earnings estimates for MSI for the current year have remained unchanged in the past 60 days at $10.20 per share.
Motorola is a leading communications equipment manufacturer and has strong market positions in barcode scanning, wireless infrastructure gear, and government communications.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 12.7%, on average, in the trailing four quarters. Earnings estimates for ANET stands at $4.38 per share.
Arista is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next generation data center networks.
Jabil Inc. (JBL - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 8.7%, on average, in the trailing four quarters. Earnings estimates for JBL for the current year have remained unchanged in the past 30 days at $8.37 per share.
Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
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Qorvo (QRVO) Q3 Earnings Beat Estimates, Revenues Decline Y/Y
Qorvo, Inc. (QRVO - Free Report) reported healthy third-quarter fiscal 2023 results, with the bottom and the top line surpassing the respective Zacks Consensus Estimate. However, the Greensboro, NC-based company reported year-over-year lower revenues due to weak end-market demand, elevated inventories in the post-pandemic market, underutilization of manufacturing facilities and global uncertainty.
Net Income
GAAP net loss in the reported quarter was $15.9 million or loss of 16 cents against a net income of $216.3 million or $1.95 per share in the prior-year quarter. The sharp bottom-line contraction was attributable to a significant decline in net sales.
Non-GAAP earnings in the reported quarter were $76.5 million or 75 cents per share, down from $330.4 million or $2.98 per share in the year-ago quarter. The bottom line outperformed the Zacks Consensus Estimate by 11 cents despite the year-over-year decline.
Qorvo, Inc. Price, Consensus and EPS Surprise
Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote
Revenues
Revenues fell to $743.3 million from $1,114 million in the year-ago quarter. However, the top line beat the Zacks Consensus Estimate of $727 million and it was well above the midpoint of management’s guidance. Despite witnessing a solid performance in broadband, automotive, defense and silicon, higher channel inventories in the post-pandemic scenario and a waning end market demand hampered company’s revenues.
Qorvo’s High Power Amplifier (HPA) witnessed a year-over-year decline as revenues amounted to $155 million in the December quarter, down from $182 million in the year-ago quarter. Weakness in the consumer-facing market, like SSDs and inventory consumption in the 5G base station market, stunted growth in defense and silicon carbide power devices
Low demand for WIFI products and inventory consumption also induced a fall in net sales in the company’s Connectivity & Sensors Products Group. Revenue dropped to $97 million from $158 million in the corresponding quarter previous year.
The company witnessed a 36% revenue contraction from the prior-year quarter’s levels in the Advanced Cellular Products Group. Revenues declined from $775 million in the same quarter last year to $491 million this quarter. Record decline in smartphone shipment in the December quarter associated with high inventory hampered Qorvo’s top-line performance in the segment.
Other Details
On a GAAP basis, gross profit totaled $268.1 million compared with $548.1 million in the year-ago quarter. Operating expenses increased to $259.3 million from $252.1 million in the prior-year quarter.
Non-GAAP gross margin was 40.9% compared with 52.6% in the year-ago quarter. Lower factory utilization and higher inventory-related challenges are the primary factors for this reduction. Due to OpEx discipline, the timing of product development expenditure and fewer employee-related expenses, non-GAAP operating expenses in the quarter were $205.7 million, down from $214.2 million in the prior year.
Cash Flow & Liquidity
As of Dec 31, 2022, QRVO had $918.8 million in cash and cash equivalents with $2,047.7 million of long-term debt compared with respective tallies of $972.6 million and $2,047.1 million in the year-ago period. Free cash flow at the end of the December quarter was $203 million, up from the prior year’s figure of 66.5 million.
Outlook
The company anticipates that the smartphone market situation will improve in the March quarter as more customers will enter the market. It experienced a 20% decrease in total channel inventory for its components in the Android ecosystem during the December quarter alone. Management expects supply-demand adjustments will continue further during the next quarter and its business volume will recover later this year.
For fourth-quarter fiscal 2023, Qorvo expects revenues to be $600-$640 million. The company estimates a non-GAAP gross margin of around 41% and non-GAAP earnings in the range of 10-15 cents per share.
Zacks Rank & Other Stocks to Consider
Qorvo currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Motorola Solutions, Inc. (MSI - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 6.6%, on average, in the trailing four quarters. Earnings estimates for MSI for the current year have remained unchanged in the past 60 days at $10.20 per share.
Motorola is a leading communications equipment manufacturer and has strong market positions in barcode scanning, wireless infrastructure gear, and government communications.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 12.7%, on average, in the trailing four quarters. Earnings estimates for ANET stands at $4.38 per share.
Arista is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next generation data center networks.
Jabil Inc. (JBL - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 8.7%, on average, in the trailing four quarters. Earnings estimates for JBL for the current year have remained unchanged in the past 30 days at $8.37 per share.
Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.