By Reuters | Updated: October 30, 2024
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.
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@ Thomson Reuters 2024
