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Qorvo (QRVO) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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Qorvo, Inc. (QRVO - Free Report) reported healthy first-quarter fiscal 2024 results, with the bottom and the top line beating the respective Zacks Consensus Estimate.
Demand softness in various end markets, owing to macroeconomic challenges and inventory adjustments, resulted in lower revenues year over year. However, positive demand trends for IoT connectivity solutions and design wins in defense, automotive and radar applications cushioned the top line.
Net Income
On a GAAP basis, the company reported a net loss of $43.6 million or a loss of 44 cents per share against a net income of $68.9 million or 65 cents per share in the prior-year quarter. The loss was primarily attributable to lower net sales year over year.
Non-GAAP net income in the quarter was $33.6 million or 34 cents per share, down from $238.4 million or $2.25 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimates by 19 cents.
Quarterly revenues declined to $651.2 million from $1,035.4 million in the year-earlier quarter. Despite tailwinds in defense, aerospace and automotive, weak demand in 5G infrastructure, customer inventory adjustments and underutilization of production capacity impeded revenue growth in the quarter. However, the top line beat the Zacks Consensus Estimate of $640 million.
Net sales in High-Performance Analog (HPA) were supported by multiple design wins across diverse market segments, including defense programs extending multiple years. The company secured a multi-million-dollar order for silicon carbide power devices supporting AI servers and other data center applications. Strength in automotive and radar systems enhanced the top line from this vertical. Non-GAAP operating margin in the HPA segment was 17% during the quarter.
Connectivity and Sensors Group (CSG) witnessed solid demand trends of highly-integrated IoT connectivity solutions, Wi-Fi 7 RF front ends and force-sensing touch sensors. The company secured multiple deals for Wi-Fi 7 BAW filters. It achieved Matter 1.1 certification, which significantly boosted Qorvo’s market opportunity among top smart home ecosystem customers. For the CSG segment, the non-GAAP operating margin was negative 20%.
Net sales in Advance Cellular were supported by healthy traction from leading smartphone manufacturers. Non-GAAP operating margin for the segment was 11%.
Other Details
On a GAAP basis, gross profit declined to $229.1 million from $375.3 million in the year-ago quarter. Non-GAAP gross margin was 42.9%, down from 50% reported in the prior-year quarter. Non-GAAP operating income totaled $46.7 million, witnessing a sharp decline from $284.4 million in the year-ago quarter on lower revenues.
Cash Flow & Liquidity
As of Jul 1, 2023, QRVO had $744.4 million in cash and cash equivalents with $2,048.3 million of long-term debt. The company generated $44.9 million in net cash from operating activities, with a free cash flow of $5.4 million. During the quarter, Qorvo repurchased $100 million worth of shares at an average price of $96.81.
Outlook
For second-quarter fiscal 2024, the company estimates revenues to be around $1 billion (+/- $15 million). Non-GAAP gross margin is expected in the range of 45-46%. Non-GAAP earnings per share are likely to be $1.75 at the midpoint of revenue guidance. The company expects non-GAAP operating expenses to be around $240 million in the September quarter. Management expects that channel inventory digestion will continue in the fiscal second quarter and will be normalized by the end of 2023.
For fiscal 2024, the company reiterated its earlier guidance. It expects revenues to be higher than fiscal 2023 levels, with non-GAAP gross margin of 44%.
Akamai is a global provider of content delivery networks and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. It delivered an earnings surprise of 579.03% in the last reported quarter.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Workday Inc. (WDAY - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 13.05%, on average, in the trailing four quarters.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, which makes it easier for organizations to provide analytical insights and decision support.
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Qorvo (QRVO) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
Qorvo, Inc. (QRVO - Free Report) reported healthy first-quarter fiscal 2024 results, with the bottom and the top line beating the respective Zacks Consensus Estimate.
Demand softness in various end markets, owing to macroeconomic challenges and inventory adjustments, resulted in lower revenues year over year. However, positive demand trends for IoT connectivity solutions and design wins in defense, automotive and radar applications cushioned the top line.
Net Income
On a GAAP basis, the company reported a net loss of $43.6 million or a loss of 44 cents per share against a net income of $68.9 million or 65 cents per share in the prior-year quarter. The loss was primarily attributable to lower net sales year over year.
Non-GAAP net income in the quarter was $33.6 million or 34 cents per share, down from $238.4 million or $2.25 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimates by 19 cents.
Qorvo, Inc. Price, Consensus and EPS Surprise
Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote
Revenues
Quarterly revenues declined to $651.2 million from $1,035.4 million in the year-earlier quarter. Despite tailwinds in defense, aerospace and automotive, weak demand in 5G infrastructure, customer inventory adjustments and underutilization of production capacity impeded revenue growth in the quarter. However, the top line beat the Zacks Consensus Estimate of $640 million.
Net sales in High-Performance Analog (HPA) were supported by multiple design wins across diverse market segments, including defense programs extending multiple years. The company secured a multi-million-dollar order for silicon carbide power devices supporting AI servers and other data center applications. Strength in automotive and radar systems enhanced the top line from this vertical. Non-GAAP operating margin in the HPA segment was 17% during the quarter.
Connectivity and Sensors Group (CSG) witnessed solid demand trends of highly-integrated IoT connectivity solutions, Wi-Fi 7 RF front ends and force-sensing touch sensors. The company secured multiple deals for Wi-Fi 7 BAW filters. It achieved Matter 1.1 certification, which significantly boosted Qorvo’s market opportunity among top smart home ecosystem customers. For the CSG segment, the non-GAAP operating margin was negative 20%.
Net sales in Advance Cellular were supported by healthy traction from leading smartphone manufacturers. Non-GAAP operating margin for the segment was 11%.
Other Details
On a GAAP basis, gross profit declined to $229.1 million from $375.3 million in the year-ago quarter. Non-GAAP gross margin was 42.9%, down from 50% reported in the prior-year quarter. Non-GAAP operating income totaled $46.7 million, witnessing a sharp decline from $284.4 million in the year-ago quarter on lower revenues.
Cash Flow & Liquidity
As of Jul 1, 2023, QRVO had $744.4 million in cash and cash equivalents with $2,048.3 million of long-term debt. The company generated $44.9 million in net cash from operating activities, with a free cash flow of $5.4 million. During the quarter, Qorvo repurchased $100 million worth of shares at an average price of $96.81.
Outlook
For second-quarter fiscal 2024, the company estimates revenues to be around $1 billion (+/- $15 million). Non-GAAP gross margin is expected in the range of 45-46%. Non-GAAP earnings per share are likely to be $1.75 at the midpoint of revenue guidance. The company expects non-GAAP operating expenses to be around $240 million in the September quarter. Management expects that channel inventory digestion will continue in the fiscal second quarter and will be normalized by the end of 2023.
For fiscal 2024, the company reiterated its earlier guidance. It expects revenues to be higher than fiscal 2023 levels, with non-GAAP gross margin of 44%.
Zacks Rank & Stocks to Consider
Qorvo currently carries a Zacks Rank #3 (Hold).
Akamai Technologies, Inc. (AKAM - Free Report) , currently carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It delivered an earnings surprise of 6.06% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Akamai is a global provider of content delivery networks and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. It delivered an earnings surprise of 579.03% in the last reported quarter.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Workday Inc. (WDAY - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 13.05%, on average, in the trailing four quarters.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, which makes it easier for organizations to provide analytical insights and decision support.