Chipmaker Qorvo Posts Surprise Loss, Warns of Ongoing Slump
Key Takeaways
- Qorvo reported an unexpected loss and warned of a continued slowdown in business for the rest of the fiscal year.
- The radio frequency and power chipmaker said it was experiencing an "unfavorable mix" shifting to entry-tier Android 5G smartphones at the expense of mid-tier ones.
- Qorvo added that it was taking steps to address its financial issues, including factory consolidations and cost cuts.
Shares of Qorvo (QRVO) plunged more than 25% Wednesday afternoon when the radio frequency and power chipmaker posted a surprising loss and warned of a continuing slowdown in its business.
The company reported a fiscal 2025 second-quarter loss of $17.4 million, or $0.18 per share. Analysts surveyed by Visible Alpha expected a profit of $101.9 million, or $1.03 per share. Revenue fell 5% year-over-year to $1.05 billion, basically in line with forecasts.
CFO Says Customers Choosing Entry-Tier Android 5G Smartphones
Chief Financial Officer (CFO) Grant Brown said that while the flagship and premium tiers in the smartphone market are performing well, customers are choosing entry-tier Android 5G smartphones in favor of mid-tier ones, adding that "content and ramp profiles vary by model, and we are experiencing unfavorable mix. We expect this to continue in the second half of fiscal 2025."
Sales at its Advanced Cellular Group (ACG) tumbled 12% to $751.4 million, and at its High Performance Analog (HPA) division, they slipped 1% to $148.3 million. However, sales soared 42% to $146.8 million at its Connectivity and Sensors Group (CSG).
Brown added that Qorvo was "taking appropriate actions, including factory consolidation and operating expense reductions as well as focusing on opportunities that align with our long-term profitability objectives."
Brown explained that full-year revenue and gross margin would be down slightly from fiscal 2024. The company sees current-quarter adjusted earnings per share (EPS) between $1.10 and $1.30, and revenue of $900 million, plus or minus $25 million.
Qorvo shares sank to their lowest level since the beginning of the COVID-19 pandemic in 2020.
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