Fri, Nov. 13, 5:37 PM
- Qorvo (NASDAQ:QRVO) is selling $450M worth of 2023 senior notes carrying a 6.75% interest rate, and $550M worth of 2025 senior notes carrying a 7% rate.
- Proceeds will be used for "general corporate purposes, including share repurchases and repayment of any amounts outstanding under its revolving credit facility." The offering comes a week after Qorvo announced (along with an FQ2 beat) a $1B buyback.
- Qorvo had $195M in cash as of Oct. 3, and $75M in debt.
Tue, Nov. 10, 8:32 AM| Tue, Nov. 10, 8:32 AM | 16 Comments
Fri, Nov. 6, 4:47 PM
- The Philadelphia Semi Index (SOXX +2.6%) rallied after Nvidia (NVDA +13.9%) beat estimates and provided strong guidance (gaming GPUs led the way), Skyworks (SWKS +7.1%) offered good calendar Q4 guidance and RF chip peer Qorvo (QRVO +23.2%) posted better-than-feared results and guidance. The Nasdaq rose just 0.4%.
- Also: Analog/Ethernet chipmaker Microsemi (MSCC +4.9%) beat calendar Q3 revenue estimates and offered solid Q4 guidance: Revenue of $325M-$329M and EPS of $0.70-$0.74 vs. a consensus of $323.5M and $0.72.
- Big gainers today included specialty foundry/Skyworks supplier TowerJazz (TSEM +6%), smart TV/home automation chipmaker Sigma Designs (SIGM +16.6%), telecom/networking IC provider InPhi (IPHI +6.7%), touch controller/LCD driver supplier Synaptics (SYNA +6.1%), FPGA maker Lattice Semi (LSCC +6.6%), network processor vendor Cavium (CAVM +5.6%), DSP core IP provider CEVA (CEVA +7.2%), and analog/mixed-signal chipmakers MagnaChip (MX +4.6%) and Semtech (SMTC +5.4%).
- On its earnings call (transcript), Qorvo mentioned Chinese smartphone demand (a recent headwind) is "seeing a bit of a rebound," and that the launch of 5-mode and 6-mode Chinese 4G phones is boosting RF chip content. Qorvo also thinks Chinese base station activity (an issue for many telecom chip/component firms) bottomed in Q3, but cautions a mobile infrastructure recovery is expected to be gradual.
- Microsemi stated on its call (transcript) broadband gateway chip sales were a Q3 strong point, that telecom infrastructure began to improve, and that defense/aerospace sales are expected to rebound in 2016. Industrial demand remained soft in Q3.
- MKM's Ian Ing has upgraded Nvidia to Buy, calling shares "expensive and worth it." Ing: "We see a sustainable growth trajectory, given [Nvidia's] positioning to lead in significant paradigm changes favoring more valuable semiconductor solutions: automotive evolving from driver assist to autonomous driving, gaming transitioning to virtual reality and professional or social E-sports, and cloud computing increasingly using GPU accelerators for machine learning."
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Last week: Chip stocks sell off after NXP, STMicro, others issue soft guidance
Fri, Nov. 6, 9:29 AM
Thu, Nov. 5, 6:44 PM
- Along with its FQ2 results, Qorvo (NASDAQ:QRVO) has announced a $1B, 12-month, buyback, good for repurchasing 13% of shares at current levels. The company finished a $400M buyback in September (just a month after launching it), and before that did a $200M buyback.
- FQ2 gross margin (non-GAAP) was 49.7%, down 180 bps Q/Q. Operating expenses fell by $1.9M Q/Q to $156.8M. Qorvo ended the quarter with $195M in cash, and $75M in debt.
- CEO Bob Bruggeworth: "Design activity during the quarter was particularly robust, as we secured multiple opportunities to expand content in the marquee smartphones launching in calendar 2016 and 2017 and positioned [infrastructure & defense products] to accelerate growth across its target markets."
- QRVO +14.5% after hours to $51.60.
- FQ2 results/FQ3 guidance, PR
Thu, Nov. 5, 5:40 PM
Thu, Nov. 5, 4:07 PM
Wed, Nov. 4, 5:35 PM
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Thu, Oct. 29, 12:29 PM
- Down on Monday following Dialog Semi's Q3 report and up yesterday in the wake of Apple's results/guidance, chip stocks are selling off again (SOXX -2.5%) after leading microcontroller vendor NXP (NXPI -18.2%) posted mixed Q3 results and (more importantly) guided for Q4 revenue to be down by a "low to upper-teens" % Q/Q. The Nasdaq is down 0.3%.
- Also: 1) NXP rival and fellow European chipmaker STMicroelectronics (STM -5.8%) slightly missed Q3 revenue estimates and has guided for Q4 revenue to be down 6% (+/- 3.5%) Q/Q. 2) Network processor vendor Cavium (CAVM -5%) issued light Q4 guidance, while blaming a distribution model change at its biggest data center customer. 3) Microcontroller maker Atmel (ATML -2.4%, set to be acquired by Dialog) missed Q3 revenue estimates and guided for Q4 revenue of $266M-$286M, below a $296.1M consensus.
- On the bright side, Apple-dependent Cirrus Logic (CRUS -5.7%) beat FQ2 EPS estimates (revenue was in-line) and provided solid FQ3 guidance, and fellow Apple/Samsung supplier InvenSense (INVN +14.3%) beat FQ2 estimates and issued in-line FQ3 guidance. Cirrus is nonetheless selling off; the earnings call (transcript) was generally upbeat, with management talking up FY16/FY17 growth opportunities related to smart codec and boosted amplifier sales.
- NXP merger partner Freescale (FSL -15.4%) is naturally seeing big losses. Other decliners include RF chipmakers Skyworks (SWKS -3.1%), Avago (AVGO -6%), and Qorvo (QRVO -2.6%), analog/mixed-signal chipmakers Texas Instruments (TXN -3%), ON Semi (ON -5.9%), MagnaChip (MX -6.8%), Fairchild (FCS -4.3%), Maxim (MXIM -3.1%), and IDT (IDTI -5.2%), and smart TV SoC vendor/STMicro rival Sigma Designs (SIGM -3.2%).
- Like NXP, Cirrus, and InvenSense, Skyworks, Avago, Qorvo, TI, and Fairchild are Apple suppliers. Fairchild and Maxim have recently benefited from M&A reports (I, II).
- Both NXP and STMicro reported seeing conditions deteriorate as Q3 progressed. NXP added lower-than-expected chip sell-through led to higher channel inventories, and STMicro stated "lower consumer spending in China is impacting the dynamics of the distribution channel in the region and the industry more globally, particularly in automotive." NXP has added 20M shares to its buyback in an attempt to soften the blow.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Tue, Oct. 27, 7:48 PM
- Apple beat estimates with the help of ASP/margin strength and 99% Greater China growth, reported 48M iPhone sales (consensus was around 48.5M), and guided for FQ1 revenue of $75.5B-$77.5B vs. a $77.1B consensus. The numbers are good enough for chip suppliers hammered yesterday thanks to Dialog Semi's Q3 report to move higher.
- Cirrus Logic (NASDAQ:CRUS) is up 2% after hours ahead of tomorrow afternoon's FQ2 report. Skyworks (NASDAQ:SWKS) is up 1.7%, Avago (NASDAQ:AVGO) is up 2%, InvenSense (INVN - reports tomorrow) is up 2.2%, NXP (NXPI - reports tomorrow) is up 1.3%, and Qorvo (NASDAQ:QRVO) is up 1%.
Mon, Oct. 26, 10:52 AM
- Apple suppliers Qualcomm (QCOM -2.9%), Cirrus Logic (CRUS -10.1%), Skyworks (SWKS -5.1%), Qorvo (QRVO -5%), Avago (AVGO -4.2%), Broadcom (BRCM -2.3%), NXP (NXPI -3.5%), InvenSense (INVN -2.1%), Synaptics (SYNA -4.4%), and Analog Devices (ADI -2.7%) are selling off after iPhone/iPad power management IC supplier Dialog Semi (down 18.8% in Frankfurt) reported 18% Y/Y Q3 revenue growth and guided for annual Q4 growth to be in a range of -1% to +6%. Both the Q3 sales and Q4 guidance missed consensus estimates.
- NXP merger partner Freescale (FSL -2.9%) is also lower. As is Atmel (ATML -8.1%), which is set to merge with Dialog in a cash/stock deal. Atmel was originally due to receive over half its payout in Dialog shares, whose value has fallen considerably since the deal was announced in mid-September.
- Broadcom, set to merge with Avago, reports after the bell. Apple reports tomorrow, and Cirrus, NXP, and InvenSense on Wednesday. With the help of improving demand and ongoing M&A, chip stocks had bounced strongly from their August/September lows in recent weeks.
Tue, Oct. 20, 10:24 AM
- Drexel Hamilton has launched coverage on RF chipmaker Qorvo (QRVO +1.6%), tunable RF filter developer Resonant (RESN +2.9%), and specialty foundry TowerJazz (TSEM +4.7%) with Buy ratings. Qorvo rival/TowerJazz client Skyworks has also been started at Buy, but is nonetheless down slightly.
- Qorvo, hammered in July by its soft FQ2 guidance, is down 31% YTD, and trades for just 8.8x an FY17 (ends March '17) EPS consensus of $5.45. Resonant, crushed by Skyworks' decision to terminate a development agreement, is down 66% YTD. TowerJazz is nearly flat on the year.
Wed, Oct. 14, 3:10 PM
- Though still well below its May/June highs, the Philadelphia Semi Index (SOXX +2.9%) has reached its highest levels since August following calendar Q3 results from Intel, Linear Technology, and ASML, and reports SanDisk and Fairchild are in buyout talks with potential suitors (respectively Micron/Western Digital and ON Semi/Infineon). The Nasdaq is down slightly.
- Intel (up 1.5%) beat Q3 estimates and provided in-line Q4 guidance. ASP strength and signs of stabilizing PC demand are overshadowing a full-year guidance cut for Intel's server CPU division, Linear (up 4.6%) posted mixed FQ1 results and issued above-consensus FQ2 guidance.
- Lithography equipment giant ASML (ASML -0.4%) beat Q3 EPS estimates and posted nearly in-line sales, but also guided for Q4 revenue of €1.4B ($1.61B), below a $1.77B consensus. Soft demand from foundry clients is blamed. Credit Suisse and Cowen argue ASML is hurt by a lack of exposure to the 3D NAND flash ramp.
- Aside from Linear and companies associated with the SanDisk/Fairchild reports, chipmakers seeing big gains include NXP (NXPI +4.6%), Freescale (FSL +3.6%), Himax (HIMX +4.2%), Qorvo (QRVO +4.9%), Cypress (CY +6.9%), AppliedMicro (AMCC +4.9%), and Linear/Fairchild peers Semtech (SMTC +4.7%), MangaChip (MX +4.6%), Diodes (DIOD +4%), and Power Integrations (POWI +4.2%). Chip packaging/testing firms ChipMOS (IMOS +3.8%) and Amkor (AMKR +5.9%) are also rallying.
- With much already priced in, chip equipment makers are also doing well, in spite of ASML's guidance, a fresh $400M cut to Intel's 2015 capex budget (to $7.3B), and a Gartner forecast for global wafer fab equipment spend to drop 0.5% in 2015 and 2.5% in 2016 before returning to growth.
- Chip equipment gainers include Lam Research (LRCX +3.6%), KLA-Tencor (KLAC +1.6%), Kulicke & Soffa (KLIC +3.3%), and Teradyne (TER +1.9%). Possibly helping: Intel stated on its earnings call its capex will rise in 2016 from 2015's depressed levels.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Tue, Oct. 6, 12:57 PM
- Skyworks (NASDAQ:SWKS) has tumbled towards $75 after announcing it's buying storage and telecom IC vendor PMC-Sierra (NASDAQ:PMCS) for $2B in cash on hand. (PR)
- Fellow RF chipmaker Avago (AVGO -6.7%), which (thanks to the LSI acquisition) competes against PMC-Sierra in the storage controller market, is also off, as is merger partner Broadcom (BRCM -3.2%), which competes against PMC to an extent in the telecom IC and network processor markets. RF peer Qorvo (QRVO -3.3%) is also getting hit. The Nasdaq is down 1.2%.
- Possibly hurting the group: Skyworks has used the PMC deal to announce it expects FQ4 (calendar Q3) revenue of $880M and EPS of $1.52. That's slightly above prior guidance of $875M and $1.51 and a consensus of $876M and $1.51, but expectations have been high following a long string of beat-and-raise quarters.
- The PMC acquisition expands Skyworks' reach to a slew of non-RF chip markets and enterprise/telecom infrastructure end-markets. It's expected to yield $75M in cost synergies within 12 months of closing (expected in 1H16), and subsequently boost Skyworks' annual EPS by $0.75. Assuming that target is hit, Skyworks is paying 14x forward EPS.
- Update (1:04PM ET): BofA/Merrill is defending Skyworks and Avago, arguing forward P/Es of less than 10 make shares very cheap.
- Update 2 (5:01PM ET): The group staged a comeback in afternoon trading. Skyworks closed down 1.4%, Avago 3.4%, Qorvo 1.1%, and Broadcom 1.6%. The Nasdaq closed down 0.7%.
Thu, Oct. 1, 2:01 PM
- After outperforming yesterday as markets rallied, chip stocks are doing the opposite today amid a selloff. The Philadelphia Semi Index (SOXX -2.1%) is back below $80.
- Possibly hurting the group: Digitimes reports iPhone chip suppliers are worried Apple could cut its Q4 orders, and that one "major analog IC supplier" has disclosed a slight December order cut. At the same time, Digitimes states suppliers won't know if major order cuts will happen for at leas 1-2 months. iPhone suppliers seeing major losses include NXP (NXPI -4.2%), Avago (AVGO -3.8%), Qorvo (QRVO -4.5%), Cirrus Logic (CRUS -3.1%), Fairchild (FCS -4.9%), and Analog Devices (ADI -3.8%).
- However, it's worth noting several chipmakers lacking iPhone exposure are also down strongly. The list includes Himax (HIMX -3.5%), PMC-Sierra (PMCS -4.1%), InPhi (IPHI -4.6%), Semtech (SMTC -4.6%), and QuickLogic (QUIK -5.7%). Chip IP provider CEVA (CEVA -3.8%) and specialty foundry TowerJazz (TSEM -5%) are also selling off.
- Memory giant Micron reports after the bell.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mon, Sep. 28, 9:19 AM
- Believing FQ3 (calendar Q4) results could miss expectations given Xiaomi's struggles, weak base station demand, and a lack of upside opportunity at Apple, and that slowing Chinese smartphone growth will continue to weigh, Pac Crest's Mike McConnell has downgraded Qorvo (NASDAQ:QRVO) to Sector Weight, and cut his target by $17 to $53.
- The downgrade comes two months after Qorvo delivered soft FQ2 guidance blamed on slowing orders from Chinese phone and base station OEMs.
- iFixit's iPhone 6S teardown recently turned up a Qorvo power amplifier module (TriQuint) and antenna switch (RF Micro). The company landed similar design wins with the iPhone 6. Apple just announced it has sold over13M iPhone 6S/6S+ units following the phones' opening weekend.
- Shares have fallen to $46.65 premarket; the 52-week low is $45.00. Qorvo now trades for just 8.7x an FY17 (ends March '17) EPS consensus of $5.50.
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