Skyworks reported strong first-quarter fiscal 2015 results with adjusted earnings exceeding the Zacks Consensus Estimate by $0.05. Skyworks continues to benefit from strong underlying demand in the mobile Internet sector, backed by market share gains and new product launches. The company is also expanding its footprint in complementary new verticals such as medical, automotive, military and industrial markets, and continues to gain traction in the adjacent verticals as well. However, macroeconomic uncertainty and stiff competition might peg back its profitability to some extent going forward. Nevertheless, we maintain our long-term Outperform recommendation for the stock as we expect it to perform well above the broader market.
Headquartered in Woburn, Massachusetts, Skyworks Solutions Inc. was formed in 1962. The company changed its name to Skyworks Solutions from Alpha Industries Inc. on June 25, 2002. Skyworks Solutions designs, manufactures, and markets a broad range of high performance analog and mixed signal semiconductors that enable wireless connectivity. The company's products include power amplifiers (PAs), front-end modules (FEMs), radio frequency (RF) sub-systems, and cellular systems. Leveraging its core analog technologies, the company also offers a diverse portfolio of linear integrated circuits (ICs) that support automotive, broadband, cellular infrastructure, industrial and medical applications.
The company has designed its product portfolio around two markets cellular handsets and analog semiconductors. The handset portfolio includes highly customized power amplifiers and front-end solutions that are used in a variety of cellular devices from entry level to multimedia platforms and smartphones. The primary customers include Cisco, Ericsson, Foxconn, General Electric, Google, Honeywell, HTC, Huawei, Itron, LG Electronics, Nokia, Northrop Grumman, Philips, Samsung, Sensus, Siemens, Toshiba and ZTE.
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