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Factors Setting the Tone for Qorvo (QRVO) in Q2 Earnings

Qorvo, Inc . QRVO is scheduled to report second-quarter fiscal 2019 results on Oct 31.

Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, recording an average beat of 9.9%.

The company reported first-quarter fiscal 2019 non-GAAP earnings of 96 cents per share, surpassing the Zacks Consensus Estimate of 76 cents. The figure jumped 10.3% from the year-ago quarter.

Revenues on a non-GAAP basis increased 8.3% year over year to $692.8 million. The figure was above management's guidance range of $645-$655 million and outpaced the Zacks Consensus Estimate of $655 million.

Guidance & Estimates

For the second quarter of fiscal 2019, Qorvo expects revenues between $850 million and $860 million. The corresponding Zacks Consensus Estimate is pegged at $856.2 million, indicating growth of 4.2% from the year-ago quarter.

Qorvo, Inc. Price and EPS Surprise

Qorvo, Inc. Price and EPS Surprise | Qorvo, Inc. Quote

Earnings are projected to be approximately around $1.62 per share. The Zacks Consensus Estimate is also pegged at $1.62 per share, reflecting a rise of 6.6% year over year.

Let's see how things are shaping up for the upcoming announcement.

Factors Likely to Influence Q2 Results

Qorvo is leaving no stone unturned to capitalize on the potential of the smart home domain. The company continues to roll out new connectivity solutions.

In the quarter under review, Qorvo unveiled QPG6095 system-on-chip (SoC) controller for ultra-low-power wireless applications, which was integrated with new LEEDARSON smart light bulb and light switch solution to enhance smart home communications systems.

Moreover, the company recently introduced Internet of Things (IoT) based QPG6095M, System in Package (SiP) to improve smart home applications.

Strong demand for the company's solutions in connectivity (Wi-Fi and emerging IoT applications) is anticipated to boost Infrastructure and Defense ("IDP") segment revenues. The Zacks Consensus Estimate for IDP revenues is projected to be $220 million, indicating growth of 15.8% from the year-ago quarter.

Robust growth in company's wireless connectivity and growth in base station solutions. Rapid adoption of GaN for high-power applications, radars and other electronic warfare products are anticipated to drive top-line.

Additionally, improving China demand of smartphone units and seasonal ramps are anticipated to bolster Mobile Products ("MP") revenues.

Reportedly Apple AAPL has selected Qorvo as the secondary supplier of low-band power amplifier/duplexer (PAD) filter for its iPhone XR over Broadcom AVGO . Notably, Qorvo's another peer Skyworks' SWKS power-amplifier chips enable iPhones to transmit data at elevated speeds.

Solid demand of Qorvo's performance-tier for RF Fusion based solutions, antenna tuning, discrete components and BAW-based multiplexers is expected to be a tailwind. The Zacks Consensus Estimate for MP revenues is projected to be $635 million.

Qorvo's strength in enhanced 5G infrastructure solutions portfolio deserves a special mention. Accelerating timeline for 5G deployment is a positive.

However, the company anticipates operating expenses to increase in the second quarter to approximately $170 million on higher personnel costs, including increased design activity. This might limit margin expansion in the to-be-reported quarter.

Qorvo has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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