Will Top Line Expansion Boost Qorvo's (QRVO) Q4 Earnings?
Qorvo, Inc. QRVO is set to report fourth-quarter fiscal 2024 results on May 1, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 27.27%. It pulled off a trailing four-quarter earnings surprise of 76.41% on average.
The leading provider of radio frequency solutions is expected to have witnessed revenue growth backed by solid demand in the Advance Cellular Group (ACG). The introduction of cutting-edge solutions catering to emerging markets of electric vehicles, energy storage and solar power applications are tailwinds. Management’s strategy to combine innovation and strategic buyout to strengthen the portfolio is a positive.
Factors at Play
In the fiscal fourth quarter, Qorvo inked an agreement to acquire Anokiwave for an undisclosed amount to expand commercial prospects in the Defense & Aerospace, Satellite Communication and 5G markets. The Anokiwave team will unite with Qorvo’s High-Performance Analog (HPA) segment to develop beamformers and IF-RF (Intermediate Frequency- Radiofrequency) solutions for defense phased array and AESA radar, electronic warfare, satellite communications and 5G applications. These developments will likely be reflected in the upcoming results.
During the quarter, Qorvo extended its portfolio with the launch of four 1200V silicon carbide modules. The highly efficient modules, housed in a compact E1B package, are suitable solutions for electric vehicle charging stations, energy storage, industrial power supplies, and solar power applications. It also introduced an automotive-qualified silicon carbide field effect transistor. The solution is engineered to reduce conduction losses and boost efficiency in 750V electric vehicle designs. These developments are likely to have supported the top line during the quarter.
Per the Zacks Consensus Estimate, net sales in HPA are expected to be $140 million in the fourth quarter of fiscal 2024, implying an increase from $133 million in the year-earlier quarter. Revenues from ACG are projected at $683 million, suggesting growth from $418 million reported in the year-ago quarter. Connectivity and Sensors Group is expected to generate $103 million in revenues.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $922 million, indicating an increase from $633 million reported in the prior-year quarter. The consensus mark for earnings is pegged at $1.21 cents per share. It reported earnings of 26 cents per share in the year-ago quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Qorvo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qorvo, Inc. Price and EPS Surprise
Qorvo, Inc. price-eps-surprise | Qorvo, Inc. Quote
Zacks Rank: Qorvo currently carries a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:
Qualcomm Incorporated QCOM is set to release quarterly numbers on May 1. It has an Earnings ESP of +0.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
United States Cellular Corporation USM is scheduled to report quarterly numbers on May 2. It has an Earnings ESP of +36.36% and sports Zacks Rank of 1.
The Earnings ESP for Silicon Motion Technology SIMO is +5.96%, and it has a Zacks Rank of 2. The company is scheduled to report quarterly numbers on May 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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