Qorvo Inc (NASDAQ:QRVO), a leading provider of core technologies and RF solutions for mobile, infrastructure and defense applications, today announced financial results for the Company’s fiscal 2016 third quarter, ended January 2, 2016.

On a GAAP basis, December quarterly revenue was $620.7 million, gross margin was 37.2%, operating loss was $13.2 million, and net loss was $11.1 million or a loss of $0.08 per share based on 139.3 million shares outstanding.

On a non-GAAP basis, December quarterly revenue was $619.7 million and gross margin declined sequentially by 180 basis points to 47.9%, reflecting lower yields and inventory adjustments. Operating expenses declined sequentially to $139.8 million, reflecting less variable compensation expense and seasonally lower spending. Operating income was $156.9 million, or 25.3% of sales, and net income was $148.0 million, or $1.03 per diluted share based on 144.1 million shares outstanding. Cash flow from operations was $218.0 million, with free cash flow of $156.5 million.

Financial Outlook

Qorvo currently believes the demand environment in its end markets supports the following non-GAAP expectations for theMarch 2016 quarter:

  • Quarterly revenue of approximately $600 million
  • Gross margin of approximately 50%
  • Net interest expense of approximately $15 million
  • Tax rate of approximately 3%
  • Diluted EPS of $0.90 to $0.95 based on approximately 142 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, “The Qorvo team executed extremely well in our first full year versus calendar 2014, growing annual revenue 12%, expanding gross margin more than 400 basis points and achieving more than 40% growth in operating income. In the December quarter, Qorvo generated $218 million in cash flow from operations and repurchased $250 million in stock to enhance shareholder value.

“Qorvo is winning by leveraging our comprehensive portfolio of tightly integrated, world-class RF solutions. We are growing our dollar content at our three largest mobile customers in the most anticipated marquee smartphones being released this year, and we anticipate strong growth in IDP.”

Steve Buhaly, chief financial officer of Qorvo, said, “As we enter Qorvo’s second year, I continue to be excited about our prospects, including a significant cost-reduction roadmap and great new products, including our rapidly growing BAW-based multiplexer business and other highly integrated solutions leveraging the full breadth of our product and technology portfolio.

“Qorvo’s total cash and investments at the end of the December quarter exceeded $1 billion, and Qorvo has $750 millionremaining in our share repurchase program. We are pleased our balance sheet and strong cash flow provide the opportunity to create value for our shareholders through share repurchases while continuing to invest in internal and external opportunities to drive long-term diversified growth.” (Original Source)

Shares of Qorvo closed today at $38.78, up $1.72 or 4.64%. QRVO has a 1-year high of $88.35 and a 1-year low of $35.16. The stock’s 50-day moving average is $44.79 and its 200-day moving average is $51.42.

On the ratings front, Qorvo has been the subject of a number of recent research reports. In a report released yesterday, Goldman Sachs analyst Toshiya Hari downgraded QRVO to Hold, with a price target of $42, which implies an upside of 12.3% from current levels. Separately, on January 22, D.A. Davidson’s Thomas Diffely reiterated a Buy rating on the stock and has a price target of $75.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Toshiya Hari and Thomas Diffely have a total average return of -7.6% and 18.9% respectively. Hari has a success rate of 33.3% and is ranked #2584 out of 3612 analysts, while Diffely has a success rate of 70.3% and is ranked #78.

Overall, 3 research analysts have assigned a Hold rating and 10 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 $61.80 which is 65.3% above where the stock opened today.

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