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26 July 2013

Skyworks exceeds quarterly revenue and profit guidance

For its fiscal third-quarter 2013 (ended 28 June), Skyworks Solutions Inc of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported positive and better-than-forecast financial results. Revenue was $436.1m, up 2.6% on $425.2m last quarter and 12% on $389m a year ago, and ahead of guidance of $435m.

Fiscal Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013
Revenue $389m $421.1m $453.7m $425.2m $436.1m

Gross margin was 44%, up on 42.2% last quarter and 43.2% a year ago. “Our strong margin performance reflects the strategic shift in our product portfolio toward more differentiated performance-based solutions,” commented chief financial officer Donald Palette.
On a non-GAAP basis, operating income was $111.9m (operating margin of 25.7% of revenue), up from $99.7m (operating margin of 23.4%) last quarter and $91.7m (operating margin of 23.6%) a year ago. Net income was $103.8m ($0.54 per diluted share, exceeding guidance by $0.01), up on $91.9m ($0.48 per diluted share) last quarter and $86.1m ($0.45 per diluted share) a year ago.

Cash flow generated from operations was $65m. Capital expenditure was $33.4m, while depreciation was $18.5m. The firm also repurchased nearly 4m shares of common stock, representing an investment of $92m. Altogether, Skyworks exited the quarter with $400m in cash and no debt. “We are on a path to produce over $450m in cash flow from operations for the whole of fiscal 2013,” noted Palette.

“We had another strong performance in Q3/2013, exceeding guidance across all key metrics,” commented CEO David J. Aldrich. “I am pleased with the progress we’ve made towards our overall goals of diversification and market expansion. Both of these initiatives contributed towards our outperformance in the quarter. Our growing portfolio of highly integrated, high-performance analog solutions helped to drive strong sequential margin improvement and helped to drive earning upside,” he added.

“We are capturing margin-accretive content across a broad set of end-markets, spanning automotive, industrial, smart energy, home automation, medical, mobility and cloud computing,” Aldrich continued. “Leading customers within each of these targeted markets are increasingly requiring always-on connectivity and enhanced power efficiency, which intersects with our core competencies,” he adds. “Our system-level innovations and scale advantages are translating into accelerating top-line growth, margin expansion and, most importantly, returns well in excess of our cost of capital. Accordingly, Skyworks is well positioned to capitalize on the Internet of Things tsunami and to outpace the broader analog semiconductor market while increasing shareholder value.”

Business highlights

Skyworks listed several highlights from its latest quarter, including: enabling novel home sensor networks at an emerging global home healthcare provider; launching the industry’s lowest-noise amplifiers supporting GPS systems, broadband and satellite communications; and securing telematics and infotainment system design wins with a “strategic global automotive supplier”.

Skyworks systems have also powered Belkin, Cisco and Netgear 802.11ac enterprise routers. The firm also ramped its voltage regulators across LTE data cards; and commenced shipments of wireless networking and ZigBee solutions for security sensors, smoke alarms, motion detectors and touch pads.

Other achievements included gaining connectivity and analog control IC content at Huawei, Lenovo and ZTE; capturing multiple front-end and wireless networking sockets on Qualcomm LTE reference designs; and introducing silicon-based ultra-high-speed switching technology for carrier aggregation applications.

Outlook and guidance

“Given new program launches and an expanding product pipeline, we expect a strong second half to 2013,” said Palette. Specifically, for fiscal fourth-quarter 2013 (to end-September), Skyworks anticipates revenue will rise nearly 9% sequentially and 13% year-on-year to $475m, driven by contributions from new market initiatives, program ramps and share gains. Gross margin should be 44-44.5%. Based on the outlook for strong revenue growth, gross margin expansion and operating expense leverage, Skyworks hence expects diluted earnings per share to rise to $0.62 (up 17% year-on-year).

See related items:

Skyworks reports better-than-expected rise in quarterly revenue and earnings

Optimistic Skyworks exceeds latest quarter revenue and earnings targets

Skyworks fiscal Q4 exceeds forecast, with even better 2013 predicted

Skyworks’ revenue and profit rebound more than expected from last quarter

Tags: Skyworks


Author: Matthew Peach, Contributing Editor

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