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Will Revenue Contraction Impede Qorvo's (QRVO) Q1 Earnings?
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Qorvo, Inc. (QRVO - Free Report) is scheduled to report its first-quarter fiscal 2024 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 116.67%. It pulled off a trailing four-quarter earnings surprise of 36.08%, on average.
Despite a focus on innovation and portfolio expansion, the leading provider of core technologies and radio frequency (RF) solutions is expected to report lower revenues year over year. Soft demand trends in various end markets, geopolitical volatility and stiff competition are likely to impact the top line.
Factors at Play
In the fiscal first quarter, Qorvo extended the 5G base station product family with the introduction of next-generation power amplifier modules. These 5G modules provide optimal solutions for mMIMO (massive MIMO) wireless systems that minimize cost and maximize performance with ease of use and enhanced capacity. The solution suite includes QPB9362, a highly integrated front-end low-noise amplifier module designed primarily for the 5G Time Division Duplex system. The QPB3810 is integrated with bias control for 5G mMIMO applications. These developments are likely to have cushioned the top line.
In the quarter under review, Qorvo unveiled three best-in-class solid-state power amplifiers, the QPB2040N, QPB0220N and QPB0618N. These amplifiers are part of Qorvo's cutting-edge Spatium SSPA portfolio and cater to a wide range of applications in both commercial and defense communications, radar, electronic warfare and other wideband uses. Additionally, Qorvo introduced the QPF0219, the world's first front-end power module operating at a frequency range of 2-18 GHz. This module incorporates state-of-the-art semiconductor technology that ensures optimum performance in challenging radar applications.
During the quarter, Qorvo launched new features in its industry-leading 1.8 GHz DOCSIS 4.0 product portfolio. The newly introduced QPA3314 hybrid power double amplifier offers more RF power at a lower DC power than any other cable equipment solutions and ensures superior return loss performance with low noise and greater reliability. With over 30 products, Qorvo boasts the most comprehensive DOCSIS 4.0 product line in the industry. This includes high-output power doubles, drivers, pre-amps, return amps, VCA, DSA, switches and voltage variable equalizers. This is expected to have a positive impact on the company’s fiscal first-quarter performance.
However, Qorvo operates in a highly competitive industry with a low barrier to entry. This puts intense pressure on pricing and market share, which negatively affects profitability.
Weak demand trends in several end markets and dependence on a few key customers are major concerns. Rising geopolitical tension between the United States and China is also likely to have hurt its operations. These factors are expected to hurt the top line.
Per the Zacks consensus estimate, net sales in High-Performance Analog are expected to be $146.2 million in the first quarter of fiscal 2024. Revenues from Advance Cellular are projected at $406 million in the to-be-reported quarter. Connectivity and Sensors Group is expected to generate $87.5 million in revenues.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $640 million, indicating a decline from $1,035 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 15 cents per share. It reported earnings of $2.25 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 0.00%, with both pegged at 15 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
Sony Group Corporation (SONY - Free Report) has an Earnings ESP of +2.66% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 4.
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Will Revenue Contraction Impede Qorvo's (QRVO) Q1 Earnings?
Qorvo, Inc. (QRVO - Free Report) is scheduled to report its first-quarter fiscal 2024 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 116.67%. It pulled off a trailing four-quarter earnings surprise of 36.08%, on average.
Despite a focus on innovation and portfolio expansion, the leading provider of core technologies and radio frequency (RF) solutions is expected to report lower revenues year over year. Soft demand trends in various end markets, geopolitical volatility and stiff competition are likely to impact the top line.
Factors at Play
In the fiscal first quarter, Qorvo extended the 5G base station product family with the introduction of next-generation power amplifier modules. These 5G modules provide optimal solutions for mMIMO (massive MIMO) wireless systems that minimize cost and maximize performance with ease of use and enhanced capacity. The solution suite includes QPB9362, a highly integrated front-end low-noise amplifier module designed primarily for the 5G Time Division Duplex system. The QPB3810 is integrated with bias control for 5G mMIMO applications. These developments are likely to have cushioned the top line.
In the quarter under review, Qorvo unveiled three best-in-class solid-state power amplifiers, the QPB2040N, QPB0220N and QPB0618N. These amplifiers are part of Qorvo's cutting-edge Spatium SSPA portfolio and cater to a wide range of applications in both commercial and defense communications, radar, electronic warfare and other wideband uses. Additionally, Qorvo introduced the QPF0219, the world's first front-end power module operating at a frequency range of 2-18 GHz. This module incorporates state-of-the-art semiconductor technology that ensures optimum performance in challenging radar applications.
During the quarter, Qorvo launched new features in its industry-leading 1.8 GHz DOCSIS 4.0 product portfolio. The newly introduced QPA3314 hybrid power double amplifier offers more RF power at a lower DC power than any other cable equipment solutions and ensures superior return loss performance with low noise and greater reliability. With over 30 products, Qorvo boasts the most comprehensive DOCSIS 4.0 product line in the industry. This includes high-output power doubles, drivers, pre-amps, return amps, VCA, DSA, switches and voltage variable equalizers. This is expected to have a positive impact on the company’s fiscal first-quarter performance.
However, Qorvo operates in a highly competitive industry with a low barrier to entry. This puts intense pressure on pricing and market share, which negatively affects profitability.
Weak demand trends in several end markets and dependence on a few key customers are major concerns. Rising geopolitical tension between the United States and China is also likely to have hurt its operations. These factors are expected to hurt the top line.
Per the Zacks consensus estimate, net sales in High-Performance Analog are expected to be $146.2 million in the first quarter of fiscal 2024. Revenues from Advance Cellular are projected at $406 million in the to-be-reported quarter. Connectivity and Sensors Group is expected to generate $87.5 million in revenues.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $640 million, indicating a decline from $1,035 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 15 cents per share. It reported earnings of $2.25 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 0.00%, with both pegged at 15 cents. 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 currently 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 a beat this season:
QUALCOMM Incorporated (QCOM - Free Report) is set to release quarterly numbers on Aug 2. It has an Earnings ESP of +3.68% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
Sony Group Corporation (SONY - Free Report) has an Earnings ESP of +2.66% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 4.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.