Qorvo (QRVO) Q1 Earnings and Revenues Outpace Estimates
Premier semiconductor manufacturer Qorvo, Inc. QRVO reported solid first-quarter fiscal 2023 results driven by secular growth drivers in 5G, IoT connectivity, defense and power. Both the bottom line and the top line surpassed the respective Zacks Consensus Estimate, backed by the strength of the business model and expansion of its regional footprint.
Net Income
GAAP net income in the reported quarter was $68.9 million or 65 cents per share compared with $285.6 million or $2.51 per share in the prior-year period. The decline was primarily due to COVID mitigation efforts in China, the war in Ukraine and global supply chain disruptions.
Non-GAAP earnings in the reported quarter were $238.4 million or $2.25 per share, down from $322.6 million or $2.83 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $2.12.
Qorvo, Inc. Price, Consensus and EPS Surprise
Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote
Quarter Details
Non-GAAP revenues fell to $1,035.4 million from $1,110.4 million in the year-ago quarter. The year-over-year decline in revenues was due to the impact of global macroeconomic events on smartphone volumes, primarily within the Android ecosystem. Revenues beat the Zacks Consensus Estimate of $1,027 million.
Non-GAAP gross margin was 50% compared with 52.5% in the year-ago quarter. Non-GAAP income from operations was $284.4 million, down from $367 million. Amidst widespread supply constraints during the second quarter of the last fiscal, the company entered into a capacity reservation agreement with a silicon foundry company.
Balance Sheet
As of Jul 2, 2022, the company had $858.8 million in cash and cash equivalents with $2,047.2 million of long-term debt. Free cash flow at the end of the quarter was $229.5 million. Capital expenditure remains concentrated in areas where the company sees continued demand for differentiated products.
Outlook
For second-quarter fiscal 2023, Qorvo expects revenues to be in the range of $1.12–$1.15 billion, given a healthy demand schedule backed by an expanding market and customer exposure and a deep product and technical portfolio. The company expects non-GAAP gross margin between 49% and 50% and non-GAAP earnings in the range of $2.45-$2.65 per share. The company’s current view of the second half of the fiscal reflects lower demand, and it will reduce factory utilization to improve its inventory position.
Zacks Rank & 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.
Lemonade, Inc. LMND, sporting a Zacks Rank #1, delivered an earnings surprise of 4.6%, on average, in the trailing four quarters. Over the past year, the stock has fallen 72.2%.
Earnings estimates for the current year have moved down 41.7% since August 2021. Lemonade’s primary strategy is to provide insurance products in the U.S. and Europe.
Celsius Holdings, Inc. CELH sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 200% in the previous quarter and a stellar earnings surprise of 206.25%, on average, in the trailing four quarters. Celsius develops, markets, distributes and sells functional drinks and liquid supplements in North America, Europe, Asia and internationally.
Earnings estimates for the current year have moved up 23.7% since August 2021.
Delek US Holdings, Inc. DK sports a Zacks Rank #1. The Zacks Consensus Estimate for Delek’s current-year earnings has been revised 3239.1% upward since August 2021.
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