Restructuring, merger costs lower Qorvos fourth-quarter profit; Skyworks deal could close late 2026

As Greensboro chipmaker Qorvo Inc. prepares to be acquired by Skyworks Solutions, it reported Tuesday a 5.4% decline in net income to $29.7 million for its fourth quarter of fiscal 2026.

Qorvo, as typical, released the report after the stock market closed.

Qorvo makes semiconductor products for global markets that include the automotive, consumer, defense and aerospace, industrial and enterprise, infrastructure and 5G mobile sectors.

Qorvo has not provided a current workforce count in Greensboro, although it lists about 6,200 companywide. As recently as October 2024, Qorvo had about 1,400 Triad employees.

Skyworks, of Irvine, Calif., is a global leader in high-performance analog and mixed-signal semiconductors.

Qorvo's fourth-quarter report was limited in details, also as typical for a publicly traded company awaiting final regulatory approval for being bought.

Qorvo reported a 7% decrease in quarterly revenue to $808.3 million.

Morningstar analyst Brian Colello predicted an 8% decline in fourth-quarter revenue considering "key customer Apple builds fewer iPhones after the holidays, while Qorvo is also exiting the low end of the Android smartphone market."

"Qorvo's revenue fared a little better than expected, on par with its peer Skyworks, which reported nice growth in both mobile and broad-based semiconductors for the March quarter," Colello said.

"Skyworks saw nice growth in its comparable business segment, which it attributes to demand from Wi-Fi and automotive customers. We suspect the same is true for Qorvo."

Diluted earnings were 32 cents a share, down 1 cent from a year ago. Adjusted earnings were $1.69 a share, up from $1.42 a year ago.

The average earnings forecast was $1.21 by seven analysts surveyed by Zacks Investment Research. Analysts typically do not include one-time gains and charges in their forecasts.

Qorvo reported taking $22.4 million in restructuring charges during the quarter, along with $8.1 million in merger-related costs.

For the full year, Qorvo reported $389 million in net income, based primarily on an 11.3% decrease in operating expenses to $1.28 billion, an 8.8% drop in cost of goods to $1.99 billion, and a 1.1% revenue decline to $3.68 billion.

Bob Bruggeworth, president and chief executive officer of Qorvo, said its fourth-quarter performance "reflects continued operational excellence and the strategic optimization of business mix within and across operating segments. "

"Looking forward, we expect continued momentum reducing capital intensity and enhancing profitability."

Qorvo projected adjusted earnings of about $7 a share for fiscal 2027, but did not provide a fiscal 2027 revenue forecast because of the potential sale.

Qorvo said it repurchased $400 million worth of stock during the fourth quarter.

Qorvo announced Oct. 28 that it has agreed to be sold for between $9.7 billion and $10.1 billion in a deal involving two major suppliers to Apple.

Shareholders of both companies approved the sale on Feb. 11. The companies have said combined they would create a manufacturer valued at $22.4 billion.

Skyworks president and chief executive Phil Brace will serve as chief executive, while Bruggeworth will be named to its board of directors, which will comprise eight Skyworks representatives and three Qorvo representatives.

Notably, the companies have not identified where the combined company would be based. Skyworks shareholders would own 63% of the combined company.

Skyworks reported Tuesday having $35.6 million in second-quarter net income, down from $68.7 million a year ago. Adjusted net income was $173 million, down fdrom $196.8 million.

Revenue was at $943.7 million, compared with $953.2 million a year ago.

Qorvo did not provide an update on the sale in Tuesday's news release.

However, Brace said Tuesday during its quarterly analysts call that "regulatory reviews are progressing as expected - we have entered Phase II of the China SAMR review and are maintaining constructive dialogue with the relevant antitrust authorities.

The companies disclosed Feb. 6 the Federal Trade Commission is requesting additional information about the proposed transaction. The FTC's request extends the waiting period under the HSR Act - Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The act requires companies to notify the FTC and U.S. Justice Department before large mergers or acquisitions to allow antitrust review. The act is designed to prevent anti-competitive transactions by establishing a waiting period for agency evaluation, ensuring competition is maintained in the U.S. market.

The new waiting period is extended until 30 days after Qorvo and Skyworks have each substantially complied with the second request it received. The FTC can terminate the 30-day period earlier, and the companies can voluntarily request more time than the 30 days.

"While our formal guidance remains an expected closing early in calendar 2027, we are increasingly hopeful that we could close in late 2026," Brace said.

"We continue to make good progress in our integration planning and remain confident in our ability to realize the anticipated synergies of $500 million or more.

Brace said Skyworks' board supported Qorvo's $400 million share repurchase during the quarter, "reflecting what we believe to be a prudent and efficient deployment of capital."

"Our confidence in the strategic and financial logic of this combination remains as strong as ever, and we look forward to closing and delivering its full value to shareholders and customers."

Skyworks reported in an April regulatory filing that Bruce received $24.54 million in total compensation in fiscal 2025 - his first year with the company.

Although he was paid $571,154 in base salary and $1.15 million in incentive pay, the bulk of Bruce's compensation was in stock awards valued at $22.61 million on the date they were awarded.

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