What happened
Shares of Qorvo (QRVO 0.04%) were pummeled on Thursday. As of 3 p.m. EDT, the stock was down about 14%.
The tech stock's decline follows the mobile phone semiconductor company's earnings report, which was released after market close on Wednesday. Though the company beat analysts' average forecast for fiscal second-quarter revenue and earnings per share, its outlook was disappointing.
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So what
Qorvo's revenue increased from $1.11 billion in the year-ago quarter to $1.26 billion. Analysts, on average, were expecting revenue of $2.25 billion. Earnings per share increased by $0.59 over last year to $3.42, crushing a consensus forecast for $3.25.
But supply challenges and "other factors impacting global smartphone demand," mean that the company is expecting revenue during the holiday quarter to decline sequentially, said Qorvo chief financial officer Mark Murphy in the company's fiscal second-quarter earnings release.
Management guided for fiscal third-quarter revenue between $1.09 billion and $1.12 billion. Analysts, on average, were expecting fiscal Q3 revenue of $1.25 billion.
No what
Fortunately, Murphy implied that these challenges may be transitory in nature. "In the March quarter, we expect these challenges to moderate," he said. Of course, moderated headwinds do not mean the headwinds will no longer exist. Investors, therefore, will want to keep an eye on the challenges the company is facing to see when Qorvo may be able to fully work through them.
