Qorvo (QRVO) to Report Q1 Earnings: What's in the Cards?
Qorvo QRVO is slated to release first-quarter fiscal 2021 results on Jul 29.
The company expects first-quarter fiscal 2021 revenues in the range of $710-$750 million. The consensus mark for revenues is pegged at $730.4 million, which suggests a decline of 5.8% from the year-ago quarter’s reported figure.
Non-GAAP adjusted earnings are anticipated to be $1.13 per share at mid-point for the fiscal first quarter. The Zacks Consensus Estimate for fiscal first-quarter earnings is also pegged at $1.13 per share, unchanged in the past 30 days. The figure indicates a decline of 16.9% from the year-ago quarter’s reported figure.
Notably, the company’s earnings surpassed the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 16.4%, on average.
Qorvo, Inc. Price and EPS Surprise
Qorvo, Inc. price-eps-surprise | Qorvo, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors Likely to Have Impacted Q1
Qorvo’s fiscal first-quarter performance is expected to have benefited from the growing momentum for the company’s solutions in defense (advanced radars and other electronic warfare products) and connectivity (Wi-Fi 6). Notably, surge in remote work and e-learning trends due to the COVID-19 pandemic is expected to have driven demand for Wi-Fi 6, which is likely to have contributed to fiscal first-quarter performance.
Moreover, robust adoption of the company’ Gallium nitride (GaN) amplifiers to support high-power applications and the deployment of Massive MIMO antennas is expected to have supported the IDP segment’s revenue growth in the quarter under review.
Qorvo, which currently carries a Zacks Rank #3 (Hold), expects IDP revenues to have improved sequentially and return to year-over-year growth during first-quarter fiscal 2021. You can see the complete list of today’s Zacks #1 Rank stocks here.
Also, increasing popularity of the company's products instill confidence in the stock. Notably, shares of the company have inched up 1.6% in the year-to-date period compared with the industry’s rise of 0.4%.
However, sluggish demand for smartphones as well as coronavirus induced uncertainties is likely to have impacted the company’s fiscal first-quarter revenues. Per Gartner data, global smartphone sales witnessed a decline of 20.2% in the first quarter of calendar year 2020 and the downside is likely to have continued due to the impact of the pandemic. Qorvo expects Mobile Products (MP) division sales to have declined sequentially in the to-be-reported quarter.
Additionally, the rumored launch delay of Apple’s AAPL latest iPhone model is likely to have affected Qorvo’ top-line in the quarter under review.
Nevertheless, the solid traction for Qorvo’s ultra-high band front end modules (FEM) which have been powering 5G smartphone launches is expected to have contributed to the company’s fiscal first-quarter performance.
Yet, growing expenses on product development amid stiff competition from Skyworks SWKS and Broadcom AVGO in the radio frequency semiconductor market as are anticipated to have affected profitability in the fiscal first quarter.
Developments in Q1
Qorvo was awarded a three-year contract to advance the development of copper-pillar-on-GaN flip-chip technology by the United States Department of Defense (DoD). Moreover, four of its Wi-Fi 6 front-end modules (FEMs) were adopted by TP-Link to power the Archer AX1500 series of routers.
These deal wins highlight the popularity of Qorvo’s solutions and bode well for its prospects over the long haul.
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