Qorvo shares soared by 16.1% to close at 83.34 on the stock market today . Qorvo broke out of a 12-week consolidation period at a buy point of 81.30. Earlier in the session, Qorvo was up as much as 18.8% to 85.24.
[ibd-display-video id=3119865 width=50 float=left autostart=true] Nomura Instinet upgraded Qorvo stock to buy from neutral and raised its price target to 85 from 75 on the news.
"Qorvo's design win at Apple would secure a lucrative socket that has been held by Broadcom ( AVGO ) for the past two generations" of iPhone, Nomura analyst Krysten Sciacca said in a report to clients. The contract could add $230 million to $305 million in revenue in the second half of calendar 2018, she said. The contract is for a custom mid/high-band power amplifier duplexer.
"Importantly, this design win would signify Qorvo becoming one of only two suppliers of an integrated mid/high-band PAD," she said.
Broadcom stock fell 3.7% to finish at 238.79.
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Qorvo also pointed to radio-frequency chip business wins at Huawei and Samsung, she said.
Qorvo's contract wins overshadowed its fiscal third-quarter financial report. Qorvo delivered better-than-expected results for the December quarter, but guided well below Wall Street's targets for the current quarter.
The Greensboro, N.C.-based company reported adjusted earnings per share of $1.69, up 25% year over year, on sales of $845.7 million, up 2%, in the December quarter. Analysts expected $1.60 and $841 million, according to Zacks Investment Research.
For the March quarter, Qorvo guided to non-GAAP earnings per share of $1.05 on sales of $655 million. Analysts were modeling for $1.45 and $788 million, Zacks said.
"Management highlighted soft iPhone and China smartphone (sales) as culprits for the weak outlook," Oppenheimer analyst Rick Schafer said in a report. He rates Qorvo stock as perform, or neutral.
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