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
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, 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. 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%.
Wed, Jul. 29, 8:48 PM
- Discussing its light FQ2 guidance on its earnings call, Qorvo (NASDAQ:QRVO) mentioned it has seen "seen a slowing among handset customers in China," and that certain Chinese customers "have a few weeks of excess inventory to work on." The Chinese smartphone market saw a rough start to the year; bulls have been hoping for a 2H15 pickup.
- Qorvo also noted weak Chinese 4G infrastructure demand has affected base station-related sales. Various other chipmakers have reported seeing the same trend.
- CEO Bob Bruggeworth promises new integrated offerings enabled by the RF Micro/TriQuint merger will help drive long-term growth. "These new Qorvo solutions, which include receive diversity modules, Wi-Fi Integrated Front End Modules, and SOI infrastructure switches, are expected to contribute meaningfully to revenue next calendar year."
- Shares fell to $59.89 in AH trading. Qorvo rival Skyworks provided stronger calendar Q3 guidance last Thursday.
- FQ1 results/FQ2 guidance, PR
Wed, Jul. 29, 4:04 PM
Thu, Jul. 23, 5:00 PM
- In addition to beating FQ3 estimates, Skyworks (NASDAQ:SWKS) is guiding for FQ4 revenue of $875M and EPS of $1.51, above a consensus of $863M and $1.42.
- FQ3 gross margin was 49%, +150 bps Q/Q and +360 bps Y/Y, and above guidance of 48%. FQ4 GM guidance is at 50%. GAAP operating expenses rose 16% Y/Y to $134.3M - $76.8M was spent on R&D and $48.6M on SG&A. Skyworks ended FQ3 with $1.11B in cash, and no debt.
- New design wins during the quarter include SkyOne Mini (RF front-end, aimed at cheaper phones) and diversity module wins for a ZTE 4G platform, antenna switch and connectivity module wins at Xiaomi, Zigbee analog front-end for Home Depot smart lighting products, and connectivity ICs for set-tops deployed by Liberty Global.
- Shares have risen to $107.01 AH. Qorvo (NASDAQ:QRVO), which reports on July 29, is up 1.5% to $76.38.
- Skyworks' FQ3 results, PR
- Earlier: Micron, RF chipmakers gain as Cirrus/SanDisk soar post-earnings
Thu, May 7, 11:13 AM
- Just as Qorvo (QRVO +9%) and Avago (AVGO +5.1%) rallied in response to Skyworks' (SWKS +2.1%) beat-and-raise FQ2 report last week, Skyworks and Avago are rallying today after Qorvo beat FQ4 estimates with the help of strong iPhone 6-related sales, and offered above-consensus FQ1 guidance.
- Needham's Quinn Bolton has upgraded Qorvo to Buy, and set an $88 target. Bolton: "Management expects continued robust revenue growth in C2H15 as it has high visibility into the major Tier 1 OEM platform launches later this year. Additionally, QRVO expects continued 4G adoption in the emerging markets to drive strong growth in F1Q16 and C2H15, echoing recent peer commentary."
- He also notes Qorvo now expects to exceed prior RF Micro/TriQuint merger synergy targets, and that its 2H15 gross margin and op. margin could respectively top targets of 50% and 30%. "We believe QRVO's valuation multiple has yet to reflect the greater than expected synergies, revenue growth and operating leverage."
- Qorvo is now aiming for more than $150M/year in synergies by the end of 2016. Major FQ4 design wins included a diversity switch module for a flagship Android phone set to launch in 2H15, and power amplifier wins for major base station and an 802.11ac Wi-Fi chipset. The company asserts the merger is helping it develop integrated RF front-end solutions combining amplifiers, filters, and diversity modules.
Wed, May 6, 4:10 PM
Fri, May 1, 12:12 PM
- A slew of firms have hiked their Skyworks (SWKS +6%) targets after the company beat FQ2 estimates with the help of strong iPhone 6/Galaxy S6-related demand, and (in contrast to many chip industry peers) provided above-consensus FQ3 guidance. Peers Qorvo (QRVO +4.5%) and Avago (AVGO +4.1%) are following Skyworks higher.
- Pac Crest's John Vinh ($110 target): "SWKS confirmed that its SkyOne Ultra front-end module has been designed into Samsung’s GS6. We believe the company’s content increased by $1 in the GS6 vs. the GS5 ... we believe this helped more than offset weakness in the China smartphone market, which was down in CQ1. SWKS still sees a strong ramp of 4G smartphones in China and estimates units growing from 100 million in 2014 to the range of 225 million to 250 million in 2015."
- Raymond James' Steven Smigle ($117 target) notes the SkyOne Mini 2G/3G/4G front-end module line (aimed at cheaper phones) has a number of Chinese design wins, and expects Chinese phone demand to rebound in 2H15. "Total sales for filters sound more bullish compared to last quarter with management believing they will exceed their goal of selling 1 billion TC-SAW filters in 2015 ... The Broad Markets segment also sounds positive with new design wins in various automotive and WiFi connectivity solutions."
- B. Riley's Craig Ellis ($120 target): "[N]ew integrated products such as diversity receive modules are poised to compliment the now-ramping SkyOne Ultra, Panasonic JV ops integration and optimization remains in early-innings, and the ability to price for value gets steadily better as the portfolio increasingly migrates to Integrated or Broad Market products which are now 69.0% of sales."
- Qorvo reports on May 6. Avago typically reports later in May.
Fri, Apr. 24, 2:03 PM
- Though the Nasdaq is up 0.7% thanks to market-pleasing earnings from Google, Microsoft, and Amazon, chip stocks (SOXX -2.1%) are adding to their Thursday losses after Freescale, Altera, Microsemi, and Maxim joined the ranks of chipmakers offering soft Q2 guidance; Texas Instruments, Xilinx, and Qualcomm did so on Wednesday afternoon.
- NXP (NXPI -4.3%), set to merge with Freescale in a cash/stock deal, is selling off ahead of its April 29 Q1 report. RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.4%), and Avago (AVGO -5.2%) are also seeing steep declines.
- Other decliners include a slew of telecom/networking, microcontroller, and analog/mixed-signal chipmakers. The group includes Marvell (MRVL -3%), ON Semi (ON -6.9%), Atmel (ATML -3.3%), Cypress (CY -4%), Lattice (LSCC -3.9%), Semtech (SMTC -6.9%), Cavium (CAVM -6%), PMC-Sierra (PMCS -2.9%), InPhi (IPHI -3.8%), and Silicon Labs (SLAB -2.9%). Chip packaging/testing firm Amkor (AMKR -5.7%) is also off; its Q1 report arrives on Monday.
- As was the case with TI and Xilinx, soft telecom equipment chip demand was often blamed by those guiding light yesterday afternoon. Freescale (FSL -3.5%) stated it expects network processor division sales to be down Q/Q and RF (base station power amplifier) division sales to be flat. Microcontroller, automotive, and analog and sensor division sales are expected to rise.
- Altera (ALTR -3.3%) stated its "telecom and wireless business, and particularly our wireless business globally looks to be quite weak in [Q2], while the rest for our business will in aggregate be flat to slightly up." Regarding its Q1 miss, the company notes "Industrial, test, compute and storage, and to a lesser extent military, fell short of our forecast" (share loss to Xilinx?).
- Maxim reports seeing "broad-based softness in communications infrastructure demand" and soft industrial bookings to go with healthier mobile/auto demand. The Galaxy S6 appears to be giving a lift to Maxim's mobile sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, Feb. 25, 6:19 PM
- In addition to beating FQ1 EPS estimates (while posting in-line revenue), Avago (NASDAQ:AVGO) is guiding for FQ2 revenue to be down 3% to up 1% Q/Q. That implies a range of $1.59B-$1.65B, above a $1.54B consensus.
- Driving the FQ1 EPS beat: Gross margin was 59%, up from FQ4's 58% and the year-ago period's 52%, and above guidance of 57.5% (+/- 1%). FQ2 GM guidance is at 58.5% (+/- 1%).
- Also helping EPS: Operating expenses totaled $293M, up from $142M a year ago thanks to acquisitions, but down from $303M in FQ4 thanks to cost cuts.
- As expected, strong iPhone-related sales acted as a big FQ1 tailwind: Wireless product sales (40% of total revenue) rose 6% Q/Q and 90% Y/Y. Wired infrastructure (21% of total revenue, boosted by the PLX and LSI acquisitions) fell 1% Q/Q and rose 52% Y/Y. Enterprise storage (29% of revenue, a product of the LSI acquisition) rose 5% Q/Q. Industrial/other (10% of revenue) fell 4% Q/Q and rose 21% Y/Y.
- Avago has risen to $119.03 AH, making new highs in the process. RF component rivals are ticking higher: Skyworks (NASDAQ:SWKS) +0.9% to $88.49. Qorvo (NASDAQ:QRVO) +1.1% to $67.92.
- Avago's FQ1 results, Emulex acquisition, PR
Wed, Jan. 28, 5:13 PM
- In its first quarter as a merged company (FQ4), Qorvo (NASDAQ:QRVO) expects revenue of $615M-$625M and EPS of $0.80-$0.90 vs. a consensus of $619M and $0.82. Expectations were high going in, following strong numbers from peers and major client Apple.
- Total FQ3 revenue was $742M - $397.1M from RF Micro, $344.9M from TriQuint - beating a consensus of $723.4M. EPS of $1.46 topped a $1.16 consensus.
- RF Micro had an FQ3 gross margin of 49.3%, up from 48% in FQ2 and 39.7% a year earlier. TriQuint had a gross margin of 48.8%, up from 46.6% in FQ2 and 37.2% a year ago. The combined company expects a GM of 46%-48% in seasonally weak FQ4, and a tax rate of just 5%-10%.
- FQ3 results, PR
Wed, Jan. 28, 4:09 PM
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