Qorvo, Inc. QRVO is set to report third-quarter fiscal 2025 results on Jan. 28, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 1.62%. It pulled off a trailing four-quarter earnings surprise of 16.58% on average.

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The leading provider of radio frequency solutions is expected to witness revenue decline year over year in the impending quarter owing to weakness in the Advance Cellular Group (ACG) segment.

Factors at Play

During the quarter, Qorvo unveiled its automotive-qualified QPF5100Q Ultra-Wideband (UWB) System-on-Chip (SoC) solution. Building on more than a decade of UWB innovation, the solution is designed to address the growing demand within the automotive industry for highly accurate and reliable UWB technology, particularly for applications such as secure keyless entry, Digital Key and UWB radar functionalities like child presence detection and motion sensing. This is expected to enable automotive designers to customize features, thus enhancing performance and differentiating end applications. The SoC is currently undergoing Design Verification Testing with leading automotive manufacturers and is scheduled to enter production later this year. This development is expected to boost QRVO’s prospects in the global automotive market significantly.

MediaTek, a Taiwanese fabless semiconductor company, has opted to deploy Qorvo’s state-of-the-art Wi-Fi 7 front-end modules that offer unmatched flexibility in power management and efficiency. With its additional transmit modes, the solution will be integrated within MediaTek’s MT6653 Wi-Fi 7/Bluetooth combo chip, delivering the best-in-class end-user experience that enables enhanced Wi-Fi 7 performance, power efficiency and technical features in mobile devices. This is likely to have boosted revenues in the Connectivity and Sensors Group (CSG) segment.

However, Qorvo operates in a competitive landscape that is becoming more complex and has low barriers to entry. As each player strives to win designs for a greater share of the pie, the battle gets tougher. The increased competition is exerting pricing pressure, which remains a matter of concern for the company. Despite major improvements in channel inventory, management anticipates the persistence of low demand in some key end markets to continue, which is likely to have affected its top-line growth.

Overall Expectations

Per the Zacks Consensus Estimate, net sales in the High-Performance Analog segment are expected to be $168.13 million in the third quarter of fiscal 2025, implying an improvement from $118.9 million in the year-earlier quarter. Revenues from ACG are projected to be $611.17 million, a decline from $846.1 million reported in the year-ago quarter due to seasonal dynamics. 

The CSG segment is expected to generate $121.11 million in revenues, up from $108.9 million in the year-ago quarter. Investment in diverse growth businesses, including an expanding portfolio of automotive solutions and SoCs for ultra-wideband, is likely to support this segment. 

For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $901.32 million, indicating a 16.1% year-over-year decline. The consensus mark for earnings is pegged at $1.20 per share, indicating a decline from $2.10 per share in the year-ago quarter.

Earning 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 $1.2 per share. 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 has 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 an earnings beat this season:

The Earnings ESP for Meta Platforms META is +6.47%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Automatic Data Processing ADP is +1.15%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jan. 29.
 
InterDigital, Inc. IDCC is set to release quarterly numbers on Feb. 20. It has an Earnings ESP of +3.21% and sports a Zacks Rank #1.

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