In the days leading up to Apple Inc's (NASDAQ:AAPL) highly-anticipated earnings report, a lesser-known stock sent a warning signal to investors regarding the iPhone maker.

Qorvo Inc (NASDAQ:QRVO), which provides parts for smartphones, reported lower-than-expected as part of its earnings report, raising concerns about Apple's iPhone sales.

What Does Qorvo Do? Qorvo is a key supplier for Apple, providing parts for iPhones, iPads and Apple Watches. Apple buys wireless chips, antenna equipment and ultra-wideband technology from Qorvo. A significant portion of Qorvo's revenue comes from its partnership with Apple.

Qorvo's Report: While Qorvo beat Street estimates on both EPS and revenue, the supplier reported lower-than-expected guidance, which sent the stock tumbling. Qorvo's CFO, Grant Brown, said that he expects revenue and gross margin to be lower in FY25 compared to FY24.

"Looking forward, the flagship and premium tiers in the smartphone market are holding up well, however, content and ramp profiles vary by model, and we are experiencing unfavorable mix," Brown said on the earnings call. "We expect this to continue in the second half of fiscal 2025."

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Due to this “unfavorable mix”and lower guidance, Qorvo's stock tumbled more than 20% Wednesday morning. Apple shares held up relatively well compared to Qorvo, taking a hit of less than 1%.

An analyst at Benchmark, Cody Acree, lowered his rating on Qorvo from Buy to Hold and removed the price target following the report, according to Barron’s. Consumers are opting for less profitable entry-tier smartphones compared to more profitable premium and mid-tier phones, explaining Qorvo's weak guidance, the analyst reportedly said.

Benzinga's PreMarket Prep, a daily show broadcast to YouTube covering the most significant headlines moving the markets, covered Qorvo's report on Wednesday morning's show.

PreMarket Prep co-host and professional trader Dennis Dick highlighted weakness in other Apple suppliers, as well as Apple's resilience despite seemingly negative headlines.

“Apple shrugs it off once again," Dick said.

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