Qorvo forecasts third-quarter results below estimates; shares down
29/10/2024 21:24
Oct 29 (Reuters) - Chipmaker Qorvo QRVO.O on Tuesday
forecast third-quarter revenue and profit below Wall Street
estimates, pressured by stiff competition and a consumer shift
towards entry-tier smartphones, sending the company's shares
down 14% in extended trading.
The demand for budget-friendly Android 5G smartphones is on
the rise from mid-tier mobile models. The company said they
don't expect this shift to reverse and the trend is expected to
continue in the second half of fiscal 2025.
"We are taking appropriate actions, including factory
consolidation and operating expense reductions as well as
focusing on opportunities that align with our long-term
profitability objectives," said CEO Grant Brown.
Qorvo also faces tough competition from smartphone-focused
chipmakers such as Qualcomm QCOM.O and Broadcom AVGO.O that
are benefiting from a recovery in the Chinese smartphone market.
Qorvo forecast third-quarter revenue of $900 million, plus
or minus $25 million, that was below analysts' estimates of
$1.06 billion, according to data compiled by LSEG data.
The company expects adjusted earnings per share of $1.10
to$1.30 for the third quarter, while analysts expect $1.92 per
share.
The company said it now expects full-year 2025 revenue and
gross margin to be slightly down, versus fiscal 2024
Samsung Electronics 005930.KS , which accounts for 12% of
the chipmaker's revenue in 2024, saw a 2.8% drop in shipments
year-on-year, according to International Data Corporation.
Qorvo's revenue for the second quarter came in at $1.05
billion, beating estimates of $1.03 billion.
On an adjusted basis, the company reported a profit of $1.88
per share in the quarter ended Sept. 30, compared with
estimates of $1.85.
(Reporting by Priyanka G in Bengaluru; Editing by Shailesh
Kuber)
((Priyanka.G@thomsonreuters.com;))