Will Lower Revenues Adversely Impact Qorvo's Q2 Earnings?

During the quarter, Qorvo, Inc. QRVO is set to report second-quarter fiscal 2026 results on Nov. 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 48.4%. It pulled off a trailing four-quarter earnings surprise of 31.2% on average. 

The leading provider of radio frequency solutions is expected to have witnessed a revenue contraction year over year owing to weakness in multiple segments. However, a strong emphasis on innovation and portfolio expansion is a tailwind.

Factors at Play

Qorvo formed a collaboration with SIAE MICROELETTRONICA, a prominent provider of microwave radio and wireless network solutions. The company will integrate Qorvo’s high-performance Beamformer Integrated Circuit (BFIC) technology into its phased array platform to develop a compact, cutting-edge Ka-band antenna solution. The solution is optimized for platforms with limited space, featuring secure and satellite links with high throughput.

Qorvo’s capabilities in millimeter-wave and microwave IC technologies, combined with SIAE’s impressive system design, will foster the development of an advanced satellite communications (satcom) solution with applications in the defense, aerospace and NewSpace sectors.

Qorvo is also likely to benefit from the faster-than-expected transition from 4G LTE to 5G technology in emerging markets. The growing 5G advanced smartphones that feature additional transmit, receive and satellite bands align favorably with Qorvo’s portfolio and boast substantial growth opportunities. The transition from legacy mechanical systems to active electronics scanning systems is driving growth in the defense and aerospace business.

However, the company operates in a highly competitive market. The fierce competition is exerting pricing pressure, which remains a matter of concern for the company. Moreover, net sales are also adversely impacted by macroeconomic headwinds, including supply chain vulnerabilities, volatility in raw material prices, tariff wars and geopolitical tensions.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1.02 billion, indicating a decline from $1.05 billion recorded a year ago. The consensus mark for earnings is pegged at $2.03 per share, indicating a rise from $1.88 per share in the year-ago quarter.

Earnings Whispers

Our proven model does not predict an earnings beat for Qorvo for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% with both pegged at $2.03 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Qorvo carries a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Advanced Micro Devices, Inc. AMD is set to release quarterly numbers on Nov. 4. It has an Earnings ESP of +0.18% and carries a Zacks Rank #3. 

The Earnings ESP for Fortinet, Inc. FTNT is +4.43% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov. 5.

The Earnings ESP for Qualcomm Incorporated QCOM is +1.43% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov. 5.

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This article originally published on Zacks Investment Research (zacks.com).

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