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 second quarter, ended October 3, 2015. In addition, the Company announced its Board of Directors has authorized a new $1 billion share repurchase program.

On a GAAP basis, September quarterly revenue was $708.3 million, gross margin was 40.2%, operating income was $18.0 million, and net income was $4.4 million, or $0.03 per diluted share based on 150.8 million shares outstanding.

On a non-GAAP basis, September quarterly revenue increased sequentially to $707.4 million and gross margin was 49.7%. Operating expenses declined sequentially, reflecting synergies realized, yielding operating income of $194.8 million, or 27.5% of sales. Net income was $183.3 million, or $1.22 per diluted share based on 150.8 million shares outstanding.

Financial Outlook

Qorvo currently believes the demand environment in its end markets supports the following non-GAAP expectations for theDecember 2015 quarter:

  • Quarterly revenue of approximately $720 million to $730 million
  • Gross margin of approximately 50%
  • A tax rate of approximately 10%
  • Diluted EPS of $1.25 to $1.30 based on approximately 147 million shares

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

Share Repurchase Program

Qorvo also announced today that its Board of Directors has authorized a new one-year $1 billion share repurchase program. Under the new share repurchase program, share repurchases will be made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which Qorvo repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program, which is effective immediately and expires on November 4, 2016, does not require the Company to repurchase a minimum number of shares, and may be modified, suspended or terminated at any time without prior notice.

Comments from Management

Bob Bruggeworth, president and chief executive officer of Qorvo, said, “The Qorvo team delivered a solid September quarter, with quarterly revenue increasing 12% year-over-year, led by strong 19% year-over-year growth in Mobile Products.

“Design activity during the quarter was particularly robust, as we secured multiple opportunities to expand content in the marquee smartphones launching in calendar 2016 and 2017 and positioned IDP to accelerate growth across its target markets.”

Steve Buhaly, chief financial officer of Qorvo, said, “In the nine months since Qorvo’s formation, revenue has grown 25% from the same period in the prior year while non-GAAP operating income has nearly doubled. We’re proud of this performance and are excited about our opportunities in the coming year.” (Original Source)

Shares of Qorvo are up 13.86% to $51.33 in after-hours trading. QRVO has a 1-year high of $88.35 and a 1-year low of $42.24. The stock’s 50-day moving average is $46.67 and its 200-day moving average is $64.41.

On the ratings front, Qorvo has been the subject of a number of recent research reports. In a report issued on October 13, Barclays analyst Blayne Curtis maintained a Hold rating on QRVO, with a price target of $50, which implies an upside of 6.9% from current levels. Separately, on October 1, Citigroup’s Atif Malik initiated coverage with a Hold rating on the stock and has a price target of $49.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Blayne Curtis and Atif Malik have a total average return of 7.9% and 9.3% respectively. Curtis has a success rate of 63.6% and is ranked #537 out of 3824 analysts, while Malik has a success rate of 52.0% and is ranked #1035.

Overall, 3 research analysts have assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $64.80 which is 38.5% above where the stock opened today.

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