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Apple Supplier Qorvo Cuts Guidance Due to the Coronavirus

By Donna Fuscaldo - Mar 3, 2020 at 2:48PM

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Apple's iPhone chip supplier Qorvo joins the list of companies issuing earnings warnings related to the coronavirus outbreak.

Apple (AAPL -1.80%) supplier Qorvo (QRVO -1.55%), which makes radio frequency chips for the iPhone, is the latest to issue an investor warning for the current quarter due to the coronavirus. 

The chipmaker had expected revenue to come in between $800 million and $840 million for the March quarter but reduced that guidance to $770 million. Qorvo said the novel coronavirus outbreak has impacted the smartphone supply chain and customers' demand more than expected. The tech company also warned the full impact of the virus "remains difficult" to forecast. 

Qorvo's ultrawideband wireless technology, which it acquired through its acquisition of Decawave, is used in the iPhone 11 for its AirDrop capability. Qorvo's chips are expected to be in the lower-cost iPhone that Apple is rumored to be launching this spring. With the cheaper iPhone, Apple is going after a market that wants the processing power without all the bells and whistles. It's not clear if the warning out of Qorvo will have any impact on the launch date for that device known now as the iPhone SE2. 

Coronavirus sign on a stock chart.

Image source: Getty Images.

Qorvo isn't the only chipmaker to temper its outlook. In early February, Qualcomm (QCOM -1.91%) lowered its earnings guidance because of the outbreak. NXP Semiconductors (NXPI -1.33%) just warned Tuesday of issues it is having due to the disruptions the coronavirus (which causes the disease COVID-19) is causing. 

The warning out of Qorvo shouldn't surprise Apple investors given that the iPhone maker already reduced its outlook for its current fiscal second quarter. In early February, Apple said it didn't expect to meet its revenue guidance because of supply chain constraints and a decline in demand for its products in China.

Since then, Apple CEO Tim Cook has expressed confidence China was getting the outbreak under control. Earlier Tuesday, Foxconn (FXCNF 3.75%), the Chinese assembler of iPhones and iPads, confirmed Cook's statement and said it expects production to be back to normal by the end of March. 

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$136.72 (-1.80%) $-2.51
Qorvo, Inc. Stock Quote
Qorvo, Inc.
$94.32 (-1.55%) $-1.49
QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
$127.74 (-1.91%) $-2.49
NXP Semiconductors N.V. Stock Quote
NXP Semiconductors N.V.
$148.03 (-1.33%) $-1.99
FIH Mobile Limited Stock Quote
FIH Mobile Limited
$0.14 (3.75%) $0.00

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