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Qorvo ( QRVO ) skirted Apple ‘s ( AAPL ) iPhone shortfall by regaining Samsung Galaxy S7 share and riding the Chinese carrier aggregation trend, Needham analyst Quinn Bolton said Thursday after the chipmaker’s blowout fiscal Q4. In morning trading on the stock market today , Qorvo stock was up 8%, trading near a three-week high above 48. But shares are down 12.5% year to date on Apple’s weakness. Qorvo’s largest customer — widely assumed to be Apple — accounts for a third of its total sales. Shares of rivals Broadcom ( AVGO ) and Skyworks Solutions ( SWKS ) were up a fraction Thursday morning, after Qorvo’s fiscal Q4 beat late Wednesday. Last week, Skyworks topped fiscal Q2 expectations, but its fiscal Q3 sales guidance lagged by about $50 million, helping send its shares down 6.9%. For Qorvo, the March quarter wrapped up with $608.1 million in sales and $1.04 earnings per share minus items, beating the consensus of 20 analysts polled by Thomson Reuters for $599.2 million and 92 cents. Year over year, sales and EPS fell 4% and 6%. Current-quarter guidance for $650 million in sales and $1.05 EPS ex items was also ahead of analysts’ views for $628.6 million and 96 cents, but that would be down 6% and 12% vs. the year-earlier quarter. On Thursday, at least four analysts boosted their price targets on Qorvo stock. Offsetting Apple’s 24% Fall Mobile sales declined 5% sequentially to $465 million, “driven by content gains on the Galaxy S7 platform that mostly offset a 24% quarter-over-quarter decline in sales to its largest customer,” Bolton wrote in a research report. Industrial and defense products rose 9% to $142 million in sales, also helping offset the hit from Apple, Bolton wrote. Bolton boosted his price target on Qorvo stock to 53 from 50 and reiterated his buy rating. Qorvo is “outperforming smartphone peers with content and share gains,” he said. Behind Apple, Samsung and Huawei are Qorvo’s largest mobile customers, Qorvo CFO Steven Buhaly said on the company’s earnings conference call late Wednesday. Qorvo “took the medicine” in December when Apple iPhone sales began slowing, he said. Outside Apple, mobile sales will be “up significantly” in the June quarter, Steven Creviston, Qorvo’s president of mobile products, said on the call. He credited growth in China and the carrier aggregation trend for the likely growth. In that segment, sales to Chinese ODMs (original design manufacturers) account for 40% of revenue. Carrier aggregation in China is driving demand for Qorvo’s radio-frequency chips, Qorvo CEO Robert Bruggeworth said on the call. Rosenblatt analyst Jun Zhang expects Qorvo to swipe Skyworks’ share on that trend. At Taiwanese MediaTek, Skyworks accounts for 80%-85% of all LTE chipsets, Cowen analyst Timothy Arcuri wrote in a report. He, too, expects Qorvo to aggressively gain share, boosting his price target to 55 from 50 but keeping his market perform rating. Scalper1 News
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