Qorvo surges 7% as Wall Street sees smartphone stabilization in Q4 results, outlook
Sundry Photography
Shares of semiconductor company Qorvo (NASDAQ:QRVO) surged nearly 7% in pre-market trading on Thursday as Wall Street analysts saw positives from the company's fourth-quarter results and guidance and noted that the smartphone recovery is starting to take shape.
Bank of America analyst Vivek Arya, who has an underperform rating and per-share price target of $100 on Qorvo (QRVO), noted the implied second-half revenue guidance was 8% above estimates, perhaps due to "incremental" content win from Apple (AAPL) and the continued clearing of channel inventory.
While the smartphone market is still struggling in certain spots, with any rebound in China seen as "muted," the company said Chinese Android sales may have at least bottomed in March. 
"While [the March quarter] could be the trough in China Android sales, we continue to wait to see trajectory of rebound in China (visibility often low) and monitor clearing of channel/high cost balance sheet inventory (needed for [gross margin] reacceleration going forward)," Arya wrote in an investor note.
Looking to the June quarter, Qorvo (QRVO) said it expects revenue to be between $620M and $660M, above the $651.19M consensus. It also expects adjusted gross margin of approximately 41.5% and adjusted diluted earnings per share of approximately 15 cents per share, compared to a consensus of 18 cents per share.
KeyBanc Capital Markets analyst John Vinh, who has a sector weight rating on Qorvo (QRVO), noted the results and guidance "bucked" the weak results from smartphone-related semiconductor companies, as it made "meaningful: progress in cleaning Android-related inventory. 
Vinh also noted that the company's gross margins are expected to rise roughly 400 basis points in the fiscal second-quarter, thanks to a seasonal ramp, while falling between 100 and 150 basis points in the third-quarter and 200 to 300 basis points in the fourth-quarter. 
Susquehanna analyst Christopher Rolland, who has a neutral rating on Qorvo (QRVO), said he was "positively surprised" by the results, even if there is still a way to go in the recovery.
"[W]e expected a weaker quarter for Qorvo, but were positively surprised as content, seasonality and inventory clearing set up a stronger September," Rolland wrote, who also boosted his per-share price target to $105 from $100.
More on Qorvo and smartphones

Qorvo FQ4 2023 Earnings Preview
Goldman leans to growth picks in either recession scenario
'Weak' IT spending in March may have impacted chips: UBS