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Will Top-Line Contraction Impact Qorvo's (QRVO) Q4 Earnings?
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Qorvo, Inc. (QRVO - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on May 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 17.19%. It pulled off a trailing four-quarter earnings surprise of 8.44%, on average. The leading provider of core technologies and radio frequency (RF) solutions is likely to have witnessed a top-line decline year over year owing to macroeconomic uncertainty, stiff competition and soft demand trends.
Factors at Play
During the fourth quarter, Qorvo launched single-chip battery management solutions to support battery packs with up to 20 cells in a series. There is a rising demand for longer battery backup, lightweight and fast-charging facilities. The newly-introduced PAC22140 and PAC25140 Power Application Controller (PAC) devices would address these needs as it reduces cost by around 30% and PCB (Printed Circuit Board) improve space utilization by more than 50%. The battery management solution consists of a low-power hibernate mode, which allows long storage time. It’s integrated high-voltage buck also reduces the thermal issue. This is expected to have a positive impact on company’s fourth quarter performance.
In the to-be-reported quarter, Qorvo introduced an advanced power solution for phased array systems. The three-chip solution for commercial and defense radar systems optimizes performance, reduces operating costs and reduces system volume by 30%. The first chip, known as the 'ACT43950', is a high-voltage constant-current capacitor charge controller that helps minimize the power storage capacitor requirements. The second chip, the ACT43850, is designed to minimize noise and improve the radar array's overall performance. The third chip, the ACT43750, a highly-integrated drain switch and negative gate voltage regulator, minimizes the impact of device aging and temperature on RF performance. These developments are likely to have cushioned the top line.
Intense competition from established players and emerging companies is likely to have strained the company’s margins. Qorvo generates a significant portion of its revenues from a small number of key customers, including major smartphone manufacturers. Lack of diverse revenue stream is making it more vulnerable to global uncertainty and economic downturns. Weak end market demand, supply chain issues and macroeconomic challenges are likely to have hurt the company’s fourth-quarter performance.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $621 million, indicating a decline from $1,166 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 12 cents per share. It reported earnings of $3.12 per share in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Qorvo this time around. 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 -2.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
The Earnings ESP for Jabil, Inc. (JBL - Free Report) is +3.38% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jun 15.
The Earnings ESP for Splunk Inc. is +12.76% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on May 24.
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Will Top-Line Contraction Impact Qorvo's (QRVO) Q4 Earnings?
Qorvo, Inc. (QRVO - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on May 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 17.19%. It pulled off a trailing four-quarter earnings surprise of 8.44%, on average. The leading provider of core technologies and radio frequency (RF) solutions is likely to have witnessed a top-line decline year over year owing to macroeconomic uncertainty, stiff competition and soft demand trends.
Factors at Play
During the fourth quarter, Qorvo launched single-chip battery management solutions to support battery packs with up to 20 cells in a series. There is a rising demand for longer battery backup, lightweight and fast-charging facilities. The newly-introduced PAC22140 and PAC25140 Power Application Controller (PAC) devices would address these needs as it reduces cost by around 30% and PCB (Printed Circuit Board) improve space utilization by more than 50%. The battery management solution consists of a low-power hibernate mode, which allows long storage time. It’s integrated high-voltage buck also reduces the thermal issue. This is expected to have a positive impact on company’s fourth quarter performance.
In the to-be-reported quarter, Qorvo introduced an advanced power solution for phased array systems. The three-chip solution for commercial and defense radar systems optimizes performance, reduces operating costs and reduces system volume by 30%. The first chip, known as the 'ACT43950', is a high-voltage constant-current capacitor charge controller that helps minimize the power storage capacitor requirements. The second chip, the ACT43850, is designed to minimize noise and improve the radar array's overall performance. The third chip, the ACT43750, a highly-integrated drain switch and negative gate voltage regulator, minimizes the impact of device aging and temperature on RF performance. These developments are likely to have cushioned the top line.
Intense competition from established players and emerging companies is likely to have strained the company’s margins. Qorvo generates a significant portion of its revenues from a small number of key customers, including major smartphone manufacturers. Lack of diverse revenue stream is making it more vulnerable to global uncertainty and economic downturns. Weak end market demand, supply chain issues and macroeconomic challenges are likely to have hurt the company’s fourth-quarter performance.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $621 million, indicating a decline from $1,166 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 12 cents per share. It reported earnings of $3.12 per share in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Qorvo this time around. 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 -2.70%. 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-eps-surprise | Qorvo, Inc. Quote
Zacks Rank: Qorvo has a Zacks Rank #4 (Sell).
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:
Zebra Technologies Corporation (ZBRA - Free Report) is set to release quarterly numbers on May 2. It has an Earnings ESP of +3.06% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Jabil, Inc. (JBL - Free Report) is +3.38% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jun 15.
The Earnings ESP for Splunk Inc. is +12.76% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on May 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.