Qorvo cuts June-quarter financial guidance due to US action against Huawei

In response to the US Department of Commerce’s Bureau of Industry and Security (BIS) adding Huawei Technologies Co Ltd and 68 of its affiliates to its ‘Entity List’ prohibiting the sale to Huawei of products covered by the Export Administration Regulations (EAR) without obtaining an appropriate export license, Qorvo Inc of Greensboro, NC, USA has updated the financial guidance it provided on 7 May for its fiscal first-quarter 2020 (to end-June 2019) and full-year 2020.

Sales from its Mobile Products (MP) and Infrastructure and Defense Products (IDP) operating segments to Huawei and its affiliates accounted for about $469m (15%) of Qorvo’s total revenue in its fiscal full-year 2019 (ended 30 March). Qorvo is continuing to review the impact of the BIS action on its business, including its ability to apply for and obtain licenses to allow it to ship products to Huawei in the future. Pending further developments, Qorvo has ceased shipments to Huawei and its affiliates and cannot predict when it will be able to resume such shipments.

In the meantime, Qorvo is cutting its fiscal first-quarter 2020 guidance for non-GAAP revenue from $780-800m to $730-750m, for gross margin from 45-45.5%, and for diluted earnings per share from $1.30 to $1.15.

Currently, for fiscal second-quarter 2020, Qorvo’s assumes no sales to Huawei and is projecting revenue to be roughly flat sequentially. However, due to the ongoing uncertainty of this situation, the firm is not providing any additional update to its fiscal 2020 guidance at this time.

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