Chipmaker Qorvo Posts Surprise Loss, Warns of Ongoing Slump

Shares of Qorvo (QRVO) fell more than 25% Wednesday afternoon when the radio frequency and power chip maker posted a surprise loss and warned of a continued slowdown in its business.

The company reported a second-quarter fiscal 2025 loss of $17.4 million, or $0.18 per share. Analysts surveyed by Visible Alpha expected profit of $101.9 million, or $1.03 per share. Revenue fell 5% year over year to $1.05 billion, essentially in line with expectations.

Customers are opting for entry-level Android 5G smartphones, says the CFO

While the flagship and premium tiers of the smartphone market are performing well, customers are opting for entry-level Android 5G smartphones in favor of mid-tier phones, said Grant Brown, chief financial officer (CFO), adding that “content and slope profiles Varies by model, we are seeing an unfavorable mix and we expect this to continue into the second half of FY2025.

Sales at Advanced Cellular Group (ACG) fell 12% to $751.4 million, and at its High Performance Analog (HPA) division, they fell 1% to $148.3 million. However, sales rose 42% to $146.8 million in the Communications and Sensors Group (CSG).

Qorvo “has taken appropriate actions, including consolidating the plant and reducing operating expenses as well as focusing on opportunities that align with our long-term profitability goals,” Brown added.

Brown explained that full-year revenue and gross margin will be down slightly from fiscal 2024. The company expects adjusted earnings per share (EPS) for the current quarter to be between $1.10 and $1.30, and revenue of $900 million, plus or minus $25 million.

Qorvo shares fell to their lowest level since the beginning of the Covid-19 pandemic in 2020.