- Though plenty of sell-side firms responded to Skyworks' (NASDAQ:SWKS) FQ3 beat and strong FQ4 guidance with target hikes and positive remarks, high pre-earnings expectations led the RF chip giant to sell off today. The Nasdaq fell 1.1%.
- Brean's Mike Burton (target hiked to $120): "We believe that the strength of the results and guidance is being driven by the increasing dollar content SWKS is seeing across its customer base (and notably at Apple). SWKS has consistently delivered above-industry growth in revenues at industry-leading operating margins." He also notes Skyworks' broad markets (non-mobile) sales made up 23% of FQ3 revenue and are growing at a 20%-25% clip.
- Pac Crest's John Vinh (target also hiked to $120) sees iPhone 6S content gains and improving Chinese phone demand as growth drivers. "We see opportunities to gain content in higher (frequency) band counts, higher throw-count switches and diversity modules."
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Jim Cramer also (briefly) defended Skyworks today, arguing iPhone sales remain healthy and that the company is still positive on Chinese and IoT-related demand.
- On the earnings call (transcript), CFO Donald Palette mentioned integrated mobile systems (e.g. RF front ends) made up 53% of revenue, with sales rising 120% Y/Y. Power amplifiers made up 24%, and broad markets the rest.
- CEO David Aldrich estimated the growth rate for Skyworks' mobile addressable market (TAM) is around 15%/year going forward. The company still expects to reach $7 in annualized EPS at some point in 2016; the pre-earnings FY16 (ends Sep. '16) consensus was at $5.98.