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
Fri, Jan. 23, 1:03 PM
- After barely moving in AH trading yesterday in response to its FQ1 beat and strong FQ2 guidance, Skyworks (SWKS +2.3%) has risen above $81 today as a flurry of bullish analyst reactions arrive. Rivals/fellow iPhone suppliers Qorvo (QRVO +4.8%) and Avago (AVGO +1.6%) are heading in the same direction.
- Brean's Mike Burton, hiking his Skyworks target by $22 to $92: "The [FQ1] upside was predominantly driven by the Integrated Solutions segment as Apple's iPhone 6/6+ ramped ... we believe LTE growth in China and several new model ramps (Samsung Galaxy S6 amongst others to be unveiled in Barcelona) coupled with Skyworks Solutions less seasonal Broad Markets business is driving the better-than-seasonal guidance."
- Burton also thinks Skyworks is on its way to achieving a 50% gross margin (up from FQ1's 46.7%), and notes inventory days (58) were down by 15 Y/Y.
- Canaccord's Mike Walkley: "We believe Skyworks' diverse analog portfolio is enabling content share gains with its smartphone customers. Further, we anticipate Skyworks' share gains in markets such as WiFi 802.11ac, wireless infrastructure, and the IoT market are also driving strong growth trends." His FY16 (ends Sep. '16) EPS estimate has been hiked by $0.66 to $5.89.
- On the CC (transcript), CEO David Aldrich noted Skyworks' non-mobile design wins include a GM telematics platform, Cisco home gateways, ZigBee connectivity modules for Philips/LG smart light bulbs, Amazon's Echo and Fire TV devices, and a DirecTV set-top. China's Xiaomi has joined Apple and Samsung as a major mobile client.
- Qorvo reports on Jan. 28.
Dec. 4, 2014, 12:14 PM
- Avago (AVGO +7.7%) has soared above $100 after beating FQ4 estimates, reporting a stronger-than-expected gross margin, and providing above-consensus FQ1 guidance.
- RF component peers Skyworks (SWKS +4.2%), RF Micro (RFMD +3.9%), and TriQuint (TQNT +4%) are also up, as is fellow iPhone supplier Cirrus Logic (CRUS +2.6%). Cirrus recently sold off after Deutsche cut its calendar Q1 iPhone production forecast.
- On its CC (transcript), Avago noted wireless growth (+73% Q/Q and +83% Y/Y) was "largely driven by the ramp of a new smartphone generation and a large North American smartphone OEM" (undoubtedly Apple).
- Avago added it also saw strong demand for FBAR filter-related products (gaining share due to 4G RF requirements) elsewhere, with demand from Chinese 4G phone OEMs particularly strong. Over 80% of wireless revenue is now FBAR-related.
- Avago expects wireless revenue to be "flat to perhaps slightly down" Q/Q in seasonally weak FQ1, with strong demand from Apple (referred to once more as "a large North American smartphone OEM") offsetting seasonal declines elsewhere. The company notes it remains "very capacity-constrained," and has been making investments to deal with the issue.
- At least 10 sell-side firms have hiked their targets.
Nov. 7, 2014, 3:18 PM
- Skyworks (SWKS -3.7%) has received at least seven target hikes since delivering above-consensus FQ1 guidance yesterday afternoon and upping its dividend. But shares are nonetheless seeing profit-taking following a huge 2014 rally. Peers RF Micro (RFMD -4.4%), TriQuint (TQNT -4.1%), and Avago (AVGO -3%), each of which has also fared well this year, are also selling off.
- Needham (target hiked to $70) notes FQ4 results benefited from "broad-based demand drivers including content gains at multiple smartphone OEMs, the LTE ramp in China, the 3G upgrade cycle in emerging markets, multi-stream 802.11ac [Wi-Fi] deployments and [high-power amplifier] penetration across multiple vertical end markets." It also observes management "expects revenue will continue to grow at a rate faster than the industry in F1Q15 and FY15 overall."
- Oppenheimer declares the RF component boom cycle to be in its early innings. Pac Crest thinks Skyworks' Apple sales are offsetting Samsung weakness, and is upbeat about strong non-mobile demand. "Channels remain lean and inventory build suggests good multi-quarter visibility," says BofA/Merrill.
- Shares currently go for 14x the pre-earnings FY15 (ends Sep. '15) EPS consensus exc. net cash; the consensus should go up post-earnings.
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 29, 2014, 7:14 PM
- In addition to trouncing FQ2 estimates, RF Micro (NASDAQ:RFMD) has guided for FQ3 revenue of $385M and EPS of $0.33, above a consensus of $357M and $0.28.
- Nonetheless, shares are down 0.8% AH, after rising 9% in regular trading due to TriQuint's (NASDAQ:TQNT) results and guidance. Strong iPhone-related sales and rising 4G phone shipments (they carry higher RF chip content) appear to be giving a lift to both companies ahead of their merger. TriQuint is down 1% after rising 9.6% in regular trading.
- Gross margin rose to 48% in FQ2 from 47.1% in FQ1 and 36.2% a year ago. GAAP costs/expenses fell 5% Y/Y to $287.4M.
- FQ2 results, PR
Oct. 29, 2014, 4:02 PM
Oct. 28, 2014, 4:28 PM
- TriQuint (NASDAQ:TQNT) expects Q4 revenue of $330M-$340M and EPS of $0.40-$0.45, well above a consensus of $313.9M and $0.35.
- The company adds it's "fully booked to the midpoint of revenue guidance." Strong iPhone-related orders are likely helping.
- Q3 gross margin was 46.6%, up from 41.7% in Q2 and 38% a year ago; a GM of 46%-48% is expected in Q4. Opex rose 9% Y/Y to $74.7M.
- Merger partner RF Micro (NASDAQ:RFMD) is following TriQuint higher ahead of tomorrow's FQ2 report.
Oct. 28, 2014, 4:05 PM| Comment!
Oct. 14, 2014, 9:33 AM
- Skyworks (NASDAQ:SWKS) expects FQ4 (Sep. quarter) revenue of $718M and EPS of $1.08, above a consensus of $679.5M and $1.01. Full FQ4 results arrive on Nov. 6.
- The RF component maker also hiked its FQ3 guidance in June. Strong iPhone 6-related demand may have contributed to the latest hike, given recent reports.
- Peers are also up strongly amid a higher open for equities: RFMD +5.5%. TQNT +5.3%. AVGO +3%. Like other chip stocks, the group sold off on Friday following Microchip's warning.
Aug. 29, 2014, 11:03 AM
- Avago (AVGO +8.1%) has received a slew of target hikes after beating FQ3 estimates, reporting strong margins, and issuing healthy FQ4 guidance. RF component peers Skyworks (SWKS +1.6%), RF Micro (RFMD +4.5%), and TriQuint (TQNT +5.2%) are also higher.
- "We believe Street continues to under-appreciate this self-help story where mgmt has a proven record of cutting costs, paying down debt, and executing on multiple secular growth cycles," says BofA/Merrill. Its FY14 and FY15 EPS forecasts have respectively been raised by 20% and 25%.
- Credit Suisse: "Avago's leverage to structural growth drivers including content increases in the Industrials/autos end-mkts and accelerating demand for bandwidth, as well as, product cycles (4G/LTE wireless ramps at Apple and China) should allow the company to outperform peers." The diversification provided by the LSI deal is seen providing "further stability."
- Morgan Stanley expresses "high conviction in management's ability to execute on driving LSI's [operating margin] from 17% to 30% over the next few years," given Avago has doubled its op. margin to 30% since its 2005 LBO.
- On the CC (transcript), CEO Hock Tan mentioned wireless sales are expected to rise over 60% Q/Q thanks to "the ramp of a new phone model and a North American smartphone customer" (a clear iPhone 6 reference). Demand for FBAR filters and related products in 4G phones remains strong.
- Wired infrastructure is expected to grow at a low-single digit rate (switch/router ASIC growth offsetting flat optical component demand), and enterprise storage is expected to see mid-single digit growth excluding the PLX acquisition.
Jul. 24, 2014, 4:22 PM
- RF Micro (NASDAQ:RFMD) expects FQ2 revenue of $345M and EPS of $0.27, above a consensus of $328.8M and $0.21.
- FQ1 gross margin was 47.1%, +510 bps Q/Q and +1200 bps Y/Y. FQ2 GM is expected to be flat to up 25 bps Q/Q.
- TriQuint (NASDAQ:TQNT) is also up. Shares of both companies initially sold off after TriQuint offered light Q3 guidance (but healthier 2H guidance) yesterday afternoon, but closed higher today.
- FQ1 results, PR
Jul. 24, 2014, 4:02 PM
Jul. 23, 2014, 6:48 PM
- TriQuint (NASDAQ:TQNT) expects Q3 revenue of $255M-$265M and EPS of $0.23-$0.25 vs. a consensus of $277.9M and $0.24.
- However, the RF component maker still expects 2H14 revenue of $550M-$600M. With a Q2 beat in tow, that implies full-year revenue of $958M-$1.008B vs. a $968.6M consensus.
- Q2 gross margin was 41.7%, up from 35.3% in Q1 and 31.3% a year ago, and soundly above guidance of 37%-38%. GM is expected to rise to 43%-45% in Q3, and full-year GM is now expected to top 40%.
- TriQuint says it's seeing strong demand both for 4G base station chips and premium RF filters for smartphones. 50 customers bought premium filters in Q2, and total discrete filter revenue is expected to more than double in 2014.
- RF Micro (NASDAQ:RFMD), whose all-stock merger with TriQuint is set to close later this year, is ticking lower ahead of tomorrow's FQ1 report. Both RF Micro and TriQuint sold off today as part of a broader chip stock rout.
- Q2 results, PR
QRVO vs. ETF Alternatives
Qorvo Inc is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defense applications. Its products include amplifiers, frequency duplexers, modules and among others.
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