Qorvo’s Upcoming Earnings: Mixed Signals Ahead of Fiscal Q3 Report
Qorvo, Inc. QRVO is scheduled to release its third-quarter fiscal 2025 results on January 28, following the market close. In its last quarter, the company surprised analysts with an earnings surprise of 1.62%, achieving an average surprise rate of 16.58% over the past four quarters.
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Qorvo, a leading provider of radio frequency solutions, anticipates a reduction in revenue year-over-year for the upcoming quarter, largely due to challenges in its Advanced Cellular Group (ACG) segment.
Current Developments and Challenges
During this quarter, Qorvo introduced its automotive-qualified QPF5100Q Ultra-Wideband (UWB) System-on-Chip (SoC). This initiative represents over ten years of innovation aimed at enhancing vehicle technologies. With a focus on secure keyless entry, Digital Key functionalities, and advanced radar applications like child presence detection, this SoC is undergoing Design Verification Testing with major automotive firms and is set for production later this year. Its launch could significantly enhance Qorvo’s position in the global automotive market.
In addition, MediaTek, a Taiwanese semiconductor firm, has chosen to implement Qorvo’s cutting-edge Wi-Fi 7 front-end modules. These modules provide superior flexibility in power management, designed to be integrated with MediaTek’s MT6653 Wi-Fi 7/Bluetooth chipset. This collaboration is expected to enhance user experiences by offering improved performance and efficiency for mobile devices, potentially boosting revenue within Qorvo’s Connectivity and Sensors Group (CSG).
However, Qorvo faces serious competition in an increasingly crowded marketplace. With low barriers to entry, the struggle to secure design wins intensifies among competitors. This scenario has led to pricing pressures, which remain a concern. Although channel inventory improvements have been made, management expects weak demand in several key markets, which could hinder overall revenue growth.
Sales Outlook for Q3
According to the Zacks Consensus Estimate, Qorvo’s net sales in the High-Performance Analog segment are expected to reach $168.13 million this quarter, reflecting an increase from $118.9 million in the same quarter last year. Conversely, ACG revenues are projected to fall to $611.17 million, down from $846.1 million reported a year ago, attributed to seasonal trends.
In contrast, the CSG segment is predicted to generate $121.11 million in revenues, rising from $108.9 million in the previous year. Ongoing investments in diverse growth areas, including its automotive solutions and UWB SoCs, are expected to bolster this segment.
For the December quarter, total revenue estimates stand at $901.32 million, which represents a 16.1% year-over-year decrease. The consensus estimate for earnings is $1.20 per share, a decline from $2.10 per share in the same quarter the past year.
Earnings Predictions
Current projections do not strengthen the case for an earnings beat for Qorvo this quarter. While a combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the likelihood of an earnings surprise, this situation does not apply here.
Earnings ESP: Qorvo’s Earnings ESP, defined as the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at 0.00%. Both metrics are currently at $1.20 per share.
Price and EPS Surprise for Qorvo, Inc.
Qorvo, Inc. Price and EPS Surprise
Zacks Rank: Qorvo currently holds a Zacks Rank of #3.
Other Stocks to Watch
Investors may also want to consider these companies, which exhibit potential for an earnings surprise this season:
The Earnings ESP for Meta Platforms META is +6.47%, and it has a Zacks Rank of 3. The company plans to announce its quarterly results on January 29. Explore the full list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Automatic Data Processing ADP is +1.15%, also sporting a Zacks Rank of 3. It will release quarterly figures on January 29.
InterDigital, Inc. IDCC is set to announce quarterly results on February 20. Its Earnings ESP stands at +3.21%, and it holds a Zacks Rank #1.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
