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7 May 2013

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

For its fiscal second-quarter 2013 (to 29 March), analog semiconductor maker Skyworks Solutions Inc of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported revenue of $425.2m (split 40% in linear products and 60% in handsets). This is up 17% on the $364.7m a year ago and exceeding the guidance of $420m.

Fiscal Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013
Revenue $364.7m $389m $421.1m $453.7m $425.2m

On a non-GAAP basis, gross margin was 42.2%, down from 43.2% a year ago. However, operating income has risen from $83.9m (an operating margin of 23.0%) to $99.7m (operating margin of 23.4%). Net income has risen from $79.8m ($0.42 per diluted share) to $91.9m ($0.48 per diluted share, $0.01 better than guidance). 

Cash flow from operations was $130.2m. Capital expenditure was $25.6m, while depreciation was $18.5m. During the quarter, Skyworks repurchased 1.4m shares of its common stock, representing an investment of over $30m. Nevertheless, cash and cash equivalents grew from $378m to $458.8m.

“Leveraging our product innovation, scale and strong customer relationships, we are solidifying our position as a highly diversified analog semiconductor market leader,” said president & CEO David J. Aldrich. “Further to that end, we are increasingly migrating our product portfolio to differentiated, system-level solutions that provide greater value to our customers and command higher margins,” he added.

Skyworks said its March-quarter highlights included ramping advanced infrastructure solutions for Aclara’s smart gas meters, and enabling vehicle infotainment systems for Ford, Lincoln and Kia with its silicon-on-insulator (SOI) switching technology. The firm also introduced several new backlight LED drivers for next-generation smartphones and tablets with display panels ranging in size from 4-inches to 12-inches. In addition, Skyworks recently partnered with Texas Instruments on utility metering, street lighting, telematics and tracking system solutions and expanded its customer engagements with SkyOne, a highly customizable, fully optimized front-end platform.

Skyworks has started volume production of antenna tuning solutions to increase data throughput in multi-band LTE applications. The firm secured an innovative power management design-win enabling photovoltaic battery charging of smartphones. Skyworks also announced support for Samsung’s Galaxy S4 platforms with 802.11ac devices, DC/DC converters, antenna switch modules and multi-mode multi-band (MMMB) power amplifiers.

“Overall, our addressable markets are expanding, and we are capitalizing on the following opportunities: first, end-market diversification; second, the connected home; third, smartphone adoption in emerging markets; and fourth, increasing content in high-end mobile devices,” said Aldrich.

“Based on current demand forecast and order visibility, we expect Q3 revenue to be $435m [representing 15% growth through the first 3 quarters of fiscal 2013] , providing a solid baseline heading into the stronger second half of the calendar year,” said VP & chief financial officer Donald W. Palette during the shareholders and analysts meeting. “Our third-quarter outlook factors in the transition of our product portfolio toward more differentiated performance-based system solutions.”

“As our better-than-seasonal results and growth outlook demonstrate, Skyworks is gaining margin-rich content and share across mobile applications while capitalizing on adjacent home automation, networking, medical, smart-grid and machine-to-machine vertical markets,” commented Aldrich. Gross margin should rise by 130-180 basis point sequentially to 43.5-44.0%, driven primarily by a more diversified, margin-accretive product mix.

Using the guidance of $435m in revenue with gross margin at the midpoint of 43.7% and $80m in operating expenses (roughly flat on fiscal Q2), Skyworks expects operating margin of more than 25% and diluted earnings per share of $0.53.

“We see a path to continue to drive further margin expansion in the second half and beyond,” said Palette. “All of the underlying drivers are in place for Skyworks to continue to outperform, putting us on a path to achieving our mid-term business model of 30% operating margin, which, as a reminder, would generate around $3 in annualized earnings per share,” he added.

See related items:

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

Skyworks’ revenue falls 29% quarter-to-quarter, but up 12% on a year ago

Tags: Skyworks


Author: Matthew Peach, Contributing Editor

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