Leading analog semiconductor manufacturer
Skyworks Solutions, Inc.
) reported strong second quarter fiscal 2014 results, exceeding
its guidance across all key metrics on superior execution of
operational plans. The company recorded net income of $76.9
million or 40 cents per share in the reported quarter, up from
$61.7 million or 32 cents per share in the year-earlier quarter.
The year-over-year increase in earnings was primarily driven by
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Excluding non-recurring items, adjusted earnings for the reported
quarter came in at 62 cents per share compared with 48 cents in
the year-ago quarter. Adjusted earnings for the reported quarter
comfortably beat the Zacks Consensus Estimate of 51 cents.
Skyworks reported revenues of $481.0 million, up 13.1% year over
year and ahead of the Zacks Consensus Estimate of $470 million.
Skyworks continues to capitalize on global mobile connectivity
and demand for high-performance solutions across a diverse set of
vertical markets. The company is empowering connectivity
across a number of strategic applications including medical
devices, wearable technologies, home automation and hybrid
vehicles as well as smartphones and tablets to facilitate better
Gross profit was $212.4 million in the reported quarter compared
with $176.7 million in the year-ago comparable period. Operating
income improved to $102.6 million from $68.7 million in the prior
year. During the reported quarter, the company leveraged its
802.11ac solutions for use in gaming consoles, set-top boxes,
BluRay players and TVs for enhanced video streaming applications.
The company generated $214 million cash from operations and ended
the quarter with cash and cash equivalents of $797.8 million.
Skyworks repurchased approximately 2 million shares during the
reported quarter. The company decided to initiate a quarterly
dividend payout to provide attractive risk-adjusted returns to
its stockholders. The cash dividend of 11 cents per share will be
paid on May 22, 2014 to shareholders of record at the close of
business on May 13.
Moving forward, Skyworks is well-positioned to capitalize on the
Internet of Things with a healthy demand for high-performance
wireless solutions in new markets. Revenues for the third quarter
of fiscal 2014 are expected to be approximately $535 million, up
23% year over year. Skyworks also expects adjusted earnings per
share to increase 35% year over year to 73 cents in the third
quarter of fiscal 2014
The company believes that its strategy of diversifying its
business and expanding into new verticals will drive growth in
the long term. Product innovation and proprietary solutions have
positioned the company well for sustainable above-market growth
in the near term.
In order to fuel its growth engine, Skyworks aims to capitalize
on three business segments − mobile Internet, vertical markets
and analog components. Demand for mobile Internet applications is
exploding with the broad proliferation of smartphones, net books,
note books, caplets and other forms of embedded wireless devices.
Skyworks also continues to consolidate its share across the
mobile Internet spectrum. This covers everything from net books
and data cards to smartphones, and even entry-level handsets.
The market is estimated to have 50 billion connections by 2020.
Some of the fastest-growing segments include medical, industrial,
automotive and smart energy where connectivity is being adopted
for the very first time. Good quality, environmentally friendly
products and sustainable business practices are key
differentiators for this company in a very competitive
environment. Consequently, we expect Skyworks to continue posting
solid operating results in the near future as well.
Skyworks currently has a Zacks Rank #4 (Sell). Better-ranked
stocks in the same sector include
Freescale Semiconductor, Ltd.
) carrying a Zacks Rank #1 (Strong Buy), and
Advanced Micro Devices, Inc.
Rubicon Technology, Inc.
), both carrying a Zacks Rank #2 (Buy).