Entering text into the input field will update the search result below

Skyworks delivers 7.1% post-earnings gain; $8 EPS target set

Nov. 06, 2015 6:30 PM ETSkyworks Solutions, Inc. (SWKS) StockSWKSBy: Eric Jhonsa, SA News Editor2 Comments
  • "[W]ithin a six-quarter to eight-quarter period, we are targeting organic annualized EPS of $8 at a revenue run rate of around $4.5 billion with gross margins in the 53% range," said CFO Don Palette during Skyworks' (NASDAQ:SWKS) FQ4 earnings call (transcript). For reference, Skyworks' pre-earnings FY16 (ends Sep. '16) revenue and EPS consensus estimates were $3.67B and $6.15, and its FQ4 gross margin 50%.
  • The factors behind Skyworks' new targets: 1) The company's addressable market is expected to grow at a mid-teens pace "for the foreseeable future," in the part due to Skyworks' ability to expand system footprint. 2) New products, higher integrated mobile RF system sales, economies of scale, filter efficiency gains, and other efforts are expected to drive continued gross margin expansion. 3) R&D investments will expand Skyworks' reach in adjacent verticals.
  • Also: CEO David Aldrich predicted Skyworks will "outpace normal seasonality" of an 8%-10% Q/Q sales drop in calendar Q1, and was upbeat when asked about design win activity and visibility regarding high-volume smartphones. "[W]e're being invited into the design cycle much, much earlier because we have a bigger footprint, we have a bigger piece of the overall system, and the system requirements are increasingly dependent upon strong analog performance ... As a result of that, we are seeing fewer competitors ... we continue to see increased content with each successive generation of design."
  • Integrated mobile systems (e.g. mobile RF modules) made up 59% of FQ4 revenue (up from FQ3's 53%), with sales rising 84% Y/Y. Power amplifiers made up 20%, and "broad markets" 22%.
  • CLSA's Srini Pajjuri is reiterating a Buy in spite of a lack of enthusiasm for Skyworks' planned acquisition of PMC-Sierra. "While PMCS offers diversification and meaningful gross margin accretion, the company participates in a niche market and we do not see many product synergies. That said, we see enough secular drivers in the core RF business and expect SWKS’ topline to continue to outgrow the broader Semi industry even with the addition of PMCS."
  • Shares rallied to $85.99 today, hitting their highest levels since late September. Many other chip stocks also fared well.
  • Skyworks' FQ4 results/FQ1 guidance

Recommended For You

About SWKS Stock

SymbolLast Price% Chg
Market Cap
PE
Yield (TTM)
Rev Growth (YoY)
Prev. Close
Compare to Peers

Related Stocks

SymbolLast Price% Chg
SWKS--
Skyworks Solutions, Inc.
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.