Tag Archives: qrvo

Apple Supplier Broadcom: ‘Multiple Ways To Win’ On iPhone 7 Gains

Apple ( AAPL ) supplier Broadcom ( AVGO ) likely gained another 20% in iPhone 7 content on top of continued increases in Samsung Galaxy smartphones, giving investors “multiple ways to win,” Credit Suisse analyst John Pitzer said Thursday. Broadcom is slated to report Q2 earnings on June 2 after the market close. Pitzer expects in-line Q2 sales, but he sees a “significant EPS cushion” on cost-cutting and synergies related to Broadcom’s merger with the former Avago. In February, Avago completed its $37 billion acquisition of Broadcom, with the merged company taking the Broadcom name, in a deal the companies said gives the combined entity an enterprise value of $77 billion. For Q2, the consensus of 30 analysts polled by Thomson Reuters expects Broadcom to report $3.55 billion in sales and $2.38 earnings per share minus items, up 116% and 12%, respectively, vs. the year-earlier quarter. On Wednesday, fellow Apple supplier Analog Devices ( ADI ) reported year-over-year sales declines for fiscal Q2 and guided to another 5% sales dip for its July quarter. Pitzer expects Broadcom’s July-quarter sales view to likewise disappoint. But, like Analog Devices, Broadcom expects to grow its iPhone 7 content . Three months ago, CEO Hock Tan said Broadcom’s radio-frequency (RF) content in smartphones has increased by 20% every year, and that this year will be no exception. Tan’s view came before Apple reported its first-ever decline in iPhone sales, occurring in the March quarter. Pitzer sees Broadcom guiding to $3.39 billion in fiscal Q3 sales, below the consensus view for $3.72 billion. But he boosted his EPS-minus-items view to $2.64 from $2.51, matching the consensus model. For 2016 and 2017, he expects $11.16 and $12.86 EPS ex items, respectively. Wireless sales — including sales to Apple — have declined to 25% of total revenue from 50%. Less volatile data center sales now account for half of Broadcom’s revenue, he wrote. “Broadcom’s portfolio of businesses is significantly dampening the impact of any single headwind,” he wrote in a research report. “Broadcom can weather ‘isolated storms’ while maintaining the integrity of EPS upside.” Pitzer reiterated an outperform rating and a 180 price target on Broadcom stock. Broadcom shares were down 1%, near 142, in afternoon trading on the stock market today . RF rivals Skyworks Solutions ( SWKS ) and Qorvo ( QRVO ) were down a respective 1.4% and 0.4%. The trio fell amid fresh reports examining the effect slowing smartphone sales will have on chipmakers.

Apple-Samsung Battle In China To Force Qorvo, Skyworks Volatility

Apple ( AAPL ) and Huawei will take share from Samsung and Xiaomi within the Chinese smartphone market, leading to mass volatility and an inventory work-down for chipmakers like Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ), an MKM analyst predicted Wednesday. Shares of Broadcom, Qorvo and Skyworks were up a fraction each in early afternoon trading on the stock market today , while Apple stock was down a fraction. Last month, Apple reported March-quarter sales that missed views for the first time since 2003, undercutting chip stocks, which have broadly fallen since. The Apple report bolsters concerns of a smartphone slowdown, fresh off worries that Chinese smartphone saturation would stunt further growth. But, MKM analyst Ian Ing notes, the brimming Chinese market is still buying. Of 1,000 Chinese respondents in an MKM survey, more than 60% plan to buy a new smartphone within the next three to six months vs. less than 25% of U.S. respondents, Ing wrote in a research report. Of those in China, 38% plan to switch brands. “Chinese consumers are even more gadget-friendly relative to U.S. consumers,” Ing wrote. “Ownership is higher across smartphones, PCs and tablets in rank order.” Nearly 97% of Chinese consumers own a smartphone vs. 84% of Americans, but 25% of Chinese respondents plan to add another smartphone account — likely expanding to children and the elderly — vs. only 7.5% of Americans, Ing wrote, suggesting that Chinese users refresh their smartphones annually. Advances in wireless charging and fingerprint sensing will drive further adoption, he wrote. In smartphones, Apple, Huawei and LeTV look likely to take share from Xiaomi, Samsung and Lenovo, Ing wrote. Chinese consumers are more driven by brand (68% vs. 43% of Americans) and less by cost (33% vs. 61% of Americans). Those dramatic swings in share could affect chipmakers like Qorvo and Skyworks, which are 32% and 20% exposed to China, respectively. Ing estimates 40% of Qorvo’s mobile sales stem from China. Fellow Apple suppliers Qualcomm ( QCOM ) and Broadcom are less exposed — mid-teens and less than 10%, respectively, Ing said. “That said, Qorvo is favorably exposed to Huawei as a 10% customer,” he noted.

InvenSense Sales Expected To Topple After Apple iPhone Shortfall

Apple ‘s ( AAPL ) iPhone shortfall could draw InvenSense ( INVN ) into the tornado late Monday when the sensor-chipmaker is expected to report its first-ever sales decline and its biggest earnings fall to date. InvenSense stock toppled 5.5% to 7, falling the most of IBD’s 41-company Electronic Semiconductor-Fabless industry group which was up a fraction on the stock market today . Fellow Apple suppliers Broadcom ( AVGO ) and Qualcomm ( QCOM ) stocks rose 1.2% and 0.1%, respectively, vs. flat shares of NXP Semiconductors ( NXPI ) and Cirrus Logic ( CRUS ). InvenSense follows radio-frequency supplier Qorvo ( QRVO ), which reported earnings last Wednesday. The consensus of 13 analysts polled by Thomson Reuters models $79.9 million in sales and 2 cents earnings per share ex items for InvenSense’s fiscal Q4. On a year-over-year basis, sales and EPS would be down 20% and 83%, respectively. It would be InvenSense’s fifth straight quarter of decelerating sales growth, and the first time the Apple supplier has seen sales fall vs. the year-earlier quarter. Earnings fell 14% last quarter. Three months ago, InvenSense guided to $77 million to $83 million in sales and 0-2 cents EPS ex items. During the January conference call, CFO Mark Dentinger noted a step-down at “the North American customer” — widely assumed to be Apple — and lighter sales in Korea. He expected Internet of Things sales to help fill those holes. On April 26, Apple reported its first-ever year-over-year iPhone sales decline and its first revenue drop since 2003. Teardowns show InvenSense supplies a gyroscope/accelerometer combination chip for the iPhone 6S. But InvenSense is forecast for 13% sales and 2% EPS growth in fiscal 2016 to $420.9 million and 47 cents, respectively, on healthier metrics earlier in the year. Apple shares rose 1% intraday after hitting a 2-year low on Friday.