Qorvo Inc (QRVO) Reports Fiscal 2016 First Quarter Results


Qorvo Inc (NASDAQ:QRVO), a leading provider of core technologies and RF solutions for mobile, infrastructure and aerospace/defense applications, today announced financial results for its fiscal 2016 first quarter, ended June 27, 2015.

On a GAAP basis, June quarterly revenue was $673.6 million and gross margin was 41.5%, operating loss was ($1.3) million, and net income was $2.0 million, or $0.01 per diluted share based on 154.5 million shares outstanding.

On a non-GAAP basis, June quarterly revenue was $672.7 million and gross margin was 51.5%. Synergies realized in G&A were balanced by higher investments in R&D, yielding operating income of $187.8 million, or 27.9% of sales. Net income was$168.5 million, or $1.09 per diluted share based on 154.5 million shares outstanding.

Financial Outlook

Qorvo currently believes the demand environment in its end markets supports the following non-GAAP expectations for the quarter ending October 3rd:

  • Quarterly revenue of approximately $690 to $710 million, up 4% sequentially at the midpoint
  • Gross margin of approximately 50% to 51%
  • A tax rate of 10% to 15%
  • Diluted EPS of $1.05 to $1.15 based on approximately 155 million shares

Qorvo’s actual quarterly results may differ from these expectations and projections, and such differences may be material.

Comments from Management

Bob Bruggeworth, president and chief executive officer of Qorvo, said, “Revenue in the June quarter increased 6% sequentially and 23% year-over-year, when compared to the combined revenue of RFMD and TriQuint in the June 2014quarter. Quarterly revenue was led by strong performance in Mobile Products, which posted robust 12% growth versus the prior quarter and offset the sharp sequential decline in wireless infrastructure. Quarterly gross margin expanded by 110 basis points to 51.5%, reflecting favorable product mix and the realization of cost synergies.

“We are launching an increasing number of differentiated RF solutions that leverage our unique combination of core competencies. These new Qorvo solutions, which include receive diversity modules, Wi-Fi Integrated Front End Modules, and SOI infrastructure switches, are expected to contribute meaningfully to revenue next calendar year. The Qorvo team is making outstanding progress, and we’re on track to achieve our financial model.”

The following tables set forth selected GAAP and non-GAAP financial information for Qorvo, RFMD, and TriQuint for their respective June 2015, March 2015, and June 2014 quarters. See the more detailed financial information for Qorvo, including reconciliation of GAAP and non-GAAP financial information, attached. (Original Source)

In reaction to the earnings release, shares of Qorvo are falling 14.77% to $60.30 in after-hours trading. QRVO has a 1-year high of $85.63 and a 1-year low of $63.02. The stock’s 50-day moving average is $79.63 and its 200-day moving average is $75.03.

On the ratings front, Qorvohas been the subject of a number of recent research reports. In a report issued on July 22, Brean Murray Carret analyst Mike Burton reiterated a Buy rating on QRVO, with a price target of $92, which represents a potential upside of 30.8% from where the stock is currently trading. Separately, on July 14, Mizuho’s Vijay Rakesh initiated coverage with a Buy rating on the stock and has a price target of $92.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mike Burton and Vijay Rakesh have a total average return of 17.3% and 32.2% respectively. Burton has a success rate of 57.8% and is ranked #254 out of 3718 analysts, while Rakesh has a success rate of 68.2% and is ranked #26.

The street is mostly Bullish on QRVO stock. Out of 7 analysts who cover the stock, 7 suggest a Buy rating . The 12-month average price target assigned to the stock is $90.79, which represents a potential upside of 29.1% from where the stock is currently trading.

Qorvo Inc is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defense applications.