Qorvo shares (QRVO) plunged more than 25% Wednesday afternoon when the maker of radio frequency and power chips posted a surprising loss and warned of a continued slowdown in its business.

The company reported a loss of $17.4 million in the second quarter of fiscal 2025, or $0.18 per share. Analysts surveyed by Visible Alpha expected a profit of $101.9 million, or $1.03 per share. Income fell 5% year-over-year to $1.05 billion, essentially in line with forecasts.

Qorvo shares fell to their lowest level since the start of the COVID-19 pandemic in 2020.

CFO Says Customers Choose Entry-Level 5G Android Smartphones

Chief financial officer (CFO) Grant Brown said that while the flagship and premium tiers of the smartphone market are performing well, customers are choosing entry-level 5G Android smartphones over mid-tier ones, adding that “content and ramp profiles vary according to the model, and we see unfavorable mix. We expect this to continue into the second half of fiscal 2025.”

Sales at its Advanced Cellular Group (ACG) fell 12% to $751.4 million, and sales at its High Performance Analog (HPA) division fell 1% to $148.3 million. However, sales of its Connectivity and Sensors Group (CSG) soared 42% to $146.8 million.

Brown added that Qorvo was “taking appropriate actions, including consolidating factories and reducing operating expenses, as well as focusing on opportunities that align with our long-term profitability goals.”

Brown explained that the turnover for the whole year and gross margin would be down slightly from fiscal 2024. Company sees current quarter adjusted earnings per share (EPS) between $1.10 and $1.30 and revenues of $900 million, plus or minus $25 million.