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Wed, Feb. 3, 5:35 PM
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Wed, Feb. 3, 10:42 AM
- Goldman's Toshiya Hari has downgraded Qorvo (NASDAQ:QRVO) to Neutral ahead of tomorrow afternoon's FQ3 report. His target is $42.
- Hari: "Qorvo’s closest competitor is Skyworks, and similar to SWKS, the stock is down 22% YTD underperforming the SOX by 1500bps, and is now trading near trough multiples; however we favor Skyworks (Buy) given its better return profile (Q1 vs Q4 for Qorvo on our scorecard), shareholder return (64% of FCF) and concern over whether Qorvo can execute on its mid-term targets."
- Qorvo is selling off on a morning the Nasdaq is down 1.9%. The RF chipmaker is a month removed from issuing an FQ3 warning and providing light FQ4 guidance. Last week, Skyworks posted an FQ1 beat and issued soft FQ2 guidance.
- Qorvo now only trades for 7.2x an FY17 (ends March '17) EPS consensus of $5.00. The consensus was at $5.46 prior to the warning.
Tue, Feb. 2, 2:42 PM
- On a day the Nasdaq is down 2.1%, many chip stocks are seeing outsized losses (SOXX -3.1%) after IDT (IDTI -28.3%), a mixed-signal chipmaker selling into the server, networking/telecom infrastructure, and wireless charging markets (among others), offered soft FQ4 (calendar Q1) guidance to go with an FQ3 sales beat.
- Major decliners include diversified European chipmakers NXP (NXPI -4.7%) and STMicroelectronics (STM -7%), microcontroller maker Cypress Semi (CY -6.9%), RF chipmaker Qorvo (QRVO -6.4%), motion sensor developer InvenSense (INVN -6%), chip packaging/testing firm Amkor (AMKR -6.1%), and analog/mixed-signal chipmakers MagnaChip (MX -9.8%), Inphi (IPHI -9.1%), Silicon Labs (SLAB -5%), Microsemi (MSCC -4.4%), Semtech (SMTC -5.4%), and Power Integrations (POWI -5.5%). Previously covered: Pixelworks, ON Semi.
- IDT reported Chinese telecom infrastructure demand is "normalizing to slightly less than the peak levels seen in late calendar 2014," that data center customer growth rates have slowed slightly, and that consumer demand has been affected by increased "customer smartphone shipment volatility." Both Apple and Samsung's sales have been under pressure.
- BofA/Merrill has downgraded IDT to Neutral, while Wedbush's Betsy Van Hees has gone contrarian and upgraded to Outperform. Van Hees argues IDT is still positioned to see strong FY17 growth, aided by the ramp of LRDIMM DRAM chipsets for Intel's Broadwell server CPU launch and the ramp of wireless charging IC programs at tier-1 OEMs.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Fri, Jan. 29, 3:27 PM
- Several Apple suppliers are seeing major gains after iPhone power amplifier supplier Skyworks (SWKS +5.5%) and iPhone LCD driver IC supplier Synaptics (SYNA +10.6%) delivered their calendar Q4 reports yesterday afternoon - Skyworks beat estimates, while Synaptics (initially lower) missed on sales and beat on EPS.
- Both companies provided soft Q1 guidance (I, II) - Synaptics also suggested it's seeing weakness at multiple top smartphone OEMs . But with nearly every other iPhone supplier to have reported (not to mention Apple itself) having also guided light, shares are rallying nonetheless.
- Big gainers include mobile DRAM supplier Micron (MU +11.1%), microphone supplier Knowles (KN +11.2%), motion sensor supplier InvenSense (INVN +7.5%), audio codec chip supplier Cirrus Logic (CRUS +6.6%), NFC chip/motion co-processor supplier NXP (NXPI +5.9%), and RF chip suppliers/Skyworks rivals Qorvo (QRVO +6.8%) and Avago (AVGO +5.6%). The Nasdaq is up 1.8%.
- Micron could also be getting a lift from the market-pleasing reports delivered by hard drive giants Seagate and Western Digital, given Micron is exposed to many of the same end-markets as Seagate/Western.
Cirrus Logic is adding to the big Thursday gains seen after the company provided encouraging FY17 comments in its FQ3 earnings call. InvenSense has more than recovered the Thursday losses seen after the company provided soft FQ4 guidance and suggested it had lost share at Samsung.
- Possibly helping Synaptics out: When asked about M&A reports on the earnings call, CEO Rick Bergman didn't quite shoot them down. "[W]e're not going to comment on rumors or market speculation ... at the end of the day it is our job to maximize shareholder value so we'll listen to any great ideas that can do that and evaluate them appropriately."
Meanwhile, Bergman asserted Synaptics' TDDI (integrated touch controller/display driver) sales are due to ramp strongly thanks to numerous design wins at top LCD panel makers, and that its ClearForce pressure-response tech will be "a significant differentiator" for Synaptics' TDDI offerings.
Thu, Jan. 28, 5:21 PM
- Skyworks (NASDAQ:SWKS) FQ1 beat is accompanied by guidance for FQ2 revenue of $775M and EPS of $1.24, below a consensus of $817.8M and $1.33. However, with Apple having issued light calendar Q1 guidance and many fellow iPhone suppliers (including rival Qorvo) having warned and/or issued soft guidance, the outlook is being taken in stride.
- FQ1 details: Margin gains continue boosting EPS: Non-GAAP gross margin rose 470 bps Y/Y to 51.4%. FQ2 GM guidance is at 50.5%-51%. GAAP operating expenses rose 12% Y/Y to $141.6M. Skyworks ended FQ1 with over $1.2B in cash and no debt.
New non-mobile design wins included Volkswagen telematics systems, GM vehicle-to-vehicle communications sockets, Google's Chromecast HDMI stick and Nest security cameras, and Roku set-tops.
- Qorvo (NASDAQ:QRVO) is up 2.3% after hours. Avago (NASDAQ:AVGO) is up 1.3%.
- Skyworks' FQ1 results, earnings release
Wed, Jan. 27, 8:18 AM
- Though expectations were low following warnings from Cirrus Logic, Qorvo, Analog Devices, and others, iPhone/iPad suppliers are down after Apple missed FQ1 (calendar Q4) revenue estimates (while beating on EPS), and offered soft FQ2 guidance - revenue of $50B-$53B vs. a $55.6B consensus and year-ago sales of $58B.
- FQ1 iPhone sales of 74.8M were close to Street expectations, but iPad and Mac shipments (16.1M and 5.3M, respectively) were below. On its earnings call, Apple mentioned forex swings and Chinese macro pressures are weighing on sales.
- Cirrus Logic (NASDAQ:CRUS), which reports this afternoon, is down 2% premarket. Qorvo (QRVO - reports Feb. 4) -2.7%, Skyworks (SWKS - reports tomorrow) -2%, Analog Devices (NASDAQ:ADI) -3%. Apple (NASDAQ:AAPL) itself is down 3.7%. Nasdaq futures are off 0.7%.
Fri, Jan. 22, 10:03 AM
- OTR Global reports checks indicate Qorvo (NASDAQ:QRVO) has landed a major Samsung Galaxy S7 design win, after being left out of the S6 last year. Shares are easily outpacing the Nasdaq's 2.2% gain. (source: Notable Calls)
- Qorvo fell two weeks ago after issuing a calendar Q4/Q1 warning believed to be linked to soft Apple orders, and fell again last week after Qualcomm announced an RF chip JV with TDK (possibly diminishing hopes of a Qualcomm buyout offer). Shares remain down 20% YTD.
- The S7 is expected to be unveiled at the Mobile World Congress (runs from Feb. 22-25), before seeing shipments begin in the following weeks. Qorvo's earnings arrive on Feb. 4.
Fri, Jan. 15, 2:53 PM
- In Wall Street's latest bloodletting, the Nasdaq is down 3.1% and the S&P 2.4%. The decline comes amid tumbling energy prices (crude is below $30/barrel), soft macro data, and disappointing earnings reports from the likes of Intel and Citigroup.
- Tech companies seeing outsized losses amid the carnage include chipmakers NXP (NXPI -8.1%), Qorvo (QRVO -8.9%), InvenSense (INVN -3.7%), IDT (IDTI -6.4%), Sigma Designs (SIGM -6.5%), and Knowles (KN -6.6%), as well as solar plays Trina (TSL -9.3%), ReneSola (SOL -11.5%), JinkoSolar (JKS -10.7%), Enphase (ENPH -8.5%), and Canadian Solar (CSIQ -8.4%).
- Also off sharply: Action camera leader GoPro (GPRO -8.7%), 3D printer maker 3D Systems (DDD -7.5%), daily deals leader Groupon (GRPN -6.4%), server interconnect provider Mellanox (MLNX -8.5%), OLED materials/IP provider Universal Display (OLED -10.3%), Latin American online marketplace MercadoLibre (MELI -7.2%), data management software firm Varonis (VRNS -8.3%), ad tech firm Rocket Fuel (FUEL -7.1%), Chinese online retailers Vipshop (VIPS -6.9%) and Jumei (JMEI -12.7%), and home automation system provider Control4 (CTRL -7.8%).
- GoPro is down 22% since issuing a Q4 warning on Wednesday afternoon. Trina has been downgraded to Neutral by Goldman. IDT and Mellanox could be affected by the weaker-than-expected Q4 sales reported for Intel's server CPU division (DCG).
- Previously covered: Chip equipment makers, Yandex/Qiwi, Intel, Textura, PC industry firms, Rackspace, CommVault, Ericsson
- Wednesday's notable decliners
Wed, Jan. 13, 6:57 PM
- Avago's (NASDAQ:AVGO) selloff following news Qualcomm (NASDAQ:QCOM) is forming a major RF filter and front-end module JV with Japanese filter maker TDK spells a buying opportunity, argues MKM's Ian Ing. He reiterates a Buy and $163 target.
- Ing: "For RF incumbents, the silver linings are: (1) TDK Epcos has less filter design iterations and manufacturing experience, likely resulting in good but not great products; (2) barring superior products, big OEM customers will likely be reluctant to decrease supplier diversity and concentrate more content with QCOM; and (3) using QRVO as a proxy, the RF360 JV likely won’t be producing integrated, jointly developed products until 18-24 months from now."
- Likewise, though he calls the JV a "credible threat" in the future, Raymond James' Tavis McCourt doesn't see a major near-term threat to Avago, Skyworks (NASDAQ:SWKS), or Qorvo (NASDAQ:QRVO). "While TDK has been working on bolstering its product line of BAW and TC-SAW filters, their biggest market share is in the lower margin SAW filter market where they have ~30%-35% market share. Qorvo and Avago by comparison control around 90% of the BAW market with various other firms including TDK making up the difference. Given that companies such as Apple are working with RF companies on the architecture on models that are three years out, we do not see them being able to gain any meaningful share in the near-term..."
- Citi's Atif Malik views the JV as a "sentiment negative" for Skyworks and Qorvo. "While QCOM has had limited success with in-house RF360 [front-end module] initiative, JV with TDK would increase competition in the market. Filters are the highest growth area in RF components given increasing number of bands and growing carrier complexity. Recall, Skyworks acquired Panasonic's TC-SAW assets last year and we believe is working closely with Taiyo Yuden on high end BAW filters."
- Discussing Qualcomm, Bernstein's Stacy Rasgon argues the JV is a long-term positive, while cautioning growing the business will take time. "[A]s a mechanism to gain necessary expertise and table-stakes capability in RF (with less risk than an acquisition, and without needing to stress the balance sheet or issue tons of low-valuation stock to do one) the actions today seem a reasonable step to take."
- On a day the Nasdaq dropped 3.4%, Avago fell 5.1%, Skyworks fell 6.7%, and Qorvo fell 9.8%. Diminished hopes of a Qualcomm buyout offer may have contributed to the selloff in Qorvo, whose market cap ($5.7B) is easily the smallest of the three names.
- Qualcomm's calendar Q4 report arrives on Jan. 27. Skyworks reports on Jan. 28, and Qorvo (warned last week) on Feb. 4.
Wed, Jan. 13, 10:09 AM
- Qualcomm (QCOM +1.9%) is forming a 51/49 JV with Japanese electronic component maker TDK (OTCPK:TTDKY) to be known as RF360 Holdings. The JV is declared to pair TDK's RF filter/module expertise with Qualcomm's RF front-end solutions, and will create filters and front-end modules for mobile devices, IoT hardware, drones, robots, and other end-markets.
- Deal terms: The deal is expected to close by early 2017, and is estimated to have an "aggregate transaction value" of $3B. Qualcomm says its up-front capital investment will total $1.2B, and forecasts the JV will be accretive to EPS in the 12 months following closing. It has the option to buy TDK's interest in the JV 30 months after closing. Qualcomm will also buy "certain assets" from TDK, and partner with the company in areas such as sensors and wireless charging.
- Qualcomm: "RF360 Holdings will have a comprehensive set of filters and filter technologies, including surface acoustic wave (SAW), temperature-compensated surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW) to support the wide range of frequency bands being deployed in networks across the globe. Moreover, RF360 Holdings will enable the delivery of [RF front-end] modules that will include front-end components designed and developed by [Qualcomm]. These components include CMOS, SOI and GaAS Power Amplifiers, a broad portfolio of Switches enhanced via a recent acquisition, Antenna Tuning and the industry's leading Envelope Tracking solution."
- In presentation slides (.pdf), Qualcomm notes the RF front-end market is expected to see a 13% CAGR from 2015-2020 (per Mobile Experts), eventually reaching a size of $18B (aided by growing mobile RF complexity and filter needs). The company adds the businesses being transferred to the JV by Qualcomm and TDK have a revenue run rate approaching $1B/year.
- Qualcomm is higher following the news, while RF chip/module maker Qorvo (QRVO -7.8%) is off sharply. Qorvo rivals Skyworks (SWKS -2%) and Avago (AVGO -1%) are seeing moderate losses. The group also sold off when Qualcomm first unveiled its RF360 front-end module in 2013.
Wed, Jan. 13, 9:17 AM
Fri, Jan. 8, 9:17 AM
Thu, Jan. 7, 5:38 PM
Thu, Jan. 7, 4:39 PM
Thu, Jan. 7, 4:14 PM
- Qorvo (NASDAQ:QRVO) now expects FQ3 revenue of $620M, well below prior guidance of $720M-$730M and a $723.7M consensus. The RF chipmaker blames "weaker than forecasted customer demand in the Company's Mobile Products segment."
- Revenue is expected to be flat Q/Q in FQ4. Consensus is at $641.9M. "Above-market revenue growth" is forecast for calendar 2016. FQ3 results are due on Feb. 4.
- Cirrus Logic (NASDAQ:CRUS) now expects FQ3 revenue of $347M, below prior guidance of $370M-$400M and a $386M consensus. Cirrus: "Our preliminary revenue results reflect weaker than anticipated demand for certain portable audio products. This weakness escalated over the last few weeks of December and is expected to continue to significantly impact our revenue in the March quarter."
- The audio codec developer still expects "meaningful" FY16 (ends March '16) revenue growth, and expects several new product launches to drive strong FY17 growth. FQ3 results arrive on Jan. 27.
- Both Qorvo and Cirrus are iPhone suppliers, with Cirrus getting well over half its revenue from Apple (NASDAQ:AAPL). The warnings follow multiple reports indicating Apple has cut iPhone-related orders. Cirrus has dropped to $24.52 after hours.
- Update (5:14PM ET): Qorvo is down 10.2% after resuming trading. Many other Apple suppliers are also lower.
Tue, Jan. 5, 12:32 PM
- Citing several parts suppliers, Japan's Nikkei reports Apple (AAPL -2.1%) is "expected to reduce output of the iPhone 6s and 6s Plus by around 30% in the January-March quarter compared with its original plans."
- The paper adds Apple initially told component suppliers to keep production even with that seen for the iPhone 6/6+ a year ago, but has seen 6S/6S+ inventories pile up "at retailers in markets ranging from China and Japan to Europe and the U.S."
- In December, Apple sold off after long-time bull Morgan Stanley forecast (in response to checks) iPhone unit sales will drop 6% in FY16 (ends in September), and added to its losses after Dialog Semi (gets over half its sales from Apple) issued a Q4 warning. In November, Credit Suisse reported of component order cuts.
- Apple is trading near $103 following the Nikkei's report. Suppliers Cirrus Logic (CRUS -4.6%), Skyworks (SWKS -5.2%), Qorvo (QRVO -4.8%), Avago (AVGO -1.9%), and InvenSense (INVN -2.7%) are also under pressure.
- Update: Morgan Stanley reacts to the Nikkei's report by noting a 30% production cut is more than the ~20% it was modeling. (source: Notable Calls)
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