What happened
Shares of radio frequency solutions leader Qorvo (QRVO -1.44%) fell as much as 14.9% on Friday following the company's fiscal 2017 second-quarter earnings report. At the time of this writing, shares are down about 11.5%
Image source: Qorvo.
So what
The stock's decline on Friday is likely related to a combination of mixed second-quarter results and weaker-than-expected guidance for Q3.
Qorvo reported revenue and adjusted earnings per share of $864.7 million and $1.29, respectively. While second-quarter revenue was well above a consensus analyst estimate for $835 million, analysts were expecting adjusted EPS of $1.41. The lower-than-expected profit comes as management admitted in its second-quarter earnings press release that Qorvo has "work to do on gross margin."
Furthermore, the company's outlook for third-quarter revenue in the range of $800 million to $840 million is below a consensus analyst estimate for third-quarter revenue of $844 million.
Now what
Qorvo has "taken steps to address" its weaker-than-expected gross profit margin, according to CEO Bob Bruggeworth in the company's second-quarter press release. Bruggeworth said the company is still aiming for "above-market revenue growth and non-GAAP operating income above 30%."
It also announced an authorization for up to $500 million of share repurchases, expanding on the company's prior program, which was set to expire today. The $500 million authorization includes about $159 million of authorized funds from the prior program.
