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21 May 2018

Skyworks’ March-quarter revenue grows a more-than-expected 7% year-on-year

© Semiconductor Today Magazine / Juno PublishiPicture: Disco’s DAL7440 KABRA laser saw.

For its fiscal second-quarter 2018 (to end-March), Skyworks Solutions Inc of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported revenue of $913.4m (a record for fiscal Q2), down 13% on $1052m last quarter but up 7% on $851.7m a year ago (and exceeding the $910m guidance).

Mobile (Integrated Mobile Systems and Power Amplifiers) comprised about 73% of revenue (down from 75% last quarter) and Broad Markets 27% (up from 25%). Broad Markets revenue grew about 10% sequentially.

“Skyworks delivered record top- and bottom-line results for the March quarter, driven by global demand for our high-performance connectivity engines,” says president & CEO Liam K. Griffin.

During the quarter, Skyworks partnered with the world’s largest automotive manufacturer to leverage connectivity across their global fleet; deployed integrated solutions for Honeywell’s LTE handheld enterprise hubs; ramped Wi-Fi and ZigBee modules for Nest’s connected video systems; secured new design wins at Belkin for high-speed mesh networks; supported Garmin’s latest Forerunner advanced fitness smartwatches; delivered SkyOne and SkyBlue platforms for upcoming Lenovo and Asus high-performance notebooks; and launched 802.11ac solutions for the newest DIRECTV streaming gateway.

On a non-GAAP basis, gross margin was 50.7%, down on the record 51.4% last quarter but up from 50.4% a year ago.

Operating expenses have risen further, from $116m a year ago and $127m last quarter to $132m (14.5% of revenue).

Operating income was $331.1m (operating margin of 36.3% of revenue), down from $414m last quarter but up from $312.5m a year ago.

Likewise, net income was $302.3m ($1.64 per diluted share, exceeding guidance by $0.04), down from the record $371.5m ($2.00 per diluted share) last quarter but up from $272m ($1.45 per diluted share) a year ago.

“We demonstrated continued strength in our financial fundamentals as improvements in profitability directly translated into cash flow growth,” says Griffin. Operating cash flow was $434.2m (up from $360.8m last quarter). Capital expenditure (CapEx) was $90.3m. Free cash flow was hence $344m (38% of revenue).

During the quarter, Skyworks paid dividends of $58.4m and spent $111.7m to repurchase more than 1 million shares of common stock. Overall, cash balance rose from $1.682bn to $1.881bn.

Skyworks’ board of directors has subsequently declared a cash dividend of $0.32 per share of common stock, payable on 12 June, to stockholders of record at the close of business on 22 May.

“Our solutions are enabling an expanding and diversified set of end markets spanning the Internet of Things, automotive, home security and factory automation,” says Griffin.

During the quarter, Skyworks captured strategic design wins with leading mobile customers across a number of flagship platforms, including SkyOne, DRx, GPS, Wi-Fi, power management, and precision antenna tuning solutions. In parallel, in infrastructure markets, the firm deployed Massive MIMO solutions for India’s largest network carrier, and collaborated with a premier European base-station supplier for small-cell deployments supporting AT&T, Verizon, T-Mobile, and Vodafone.

Skyworks also launched the Sky5 platform enabling 5G communications. “Skyworks is leveraging our deep systems knowledge, strategic partnerships, and formidable investments to accelerate the deployment of 5G, uniquely meeting the requirements for low-, mid-, high- and ultra-high-frequency bands with our differentiated Sky5 platform,” says Griffin. “With the launch of Sky5, Skyworks is well positioned to capitalize on the transformational applications ahead ─ powering 5G networks and facilitating instantaneous, reliable and secure wireless connectivity,” he adds.

“Strong growth in our broad market portfolio is mitigating the near-term softness at leading smartphone customers and the trade restrictions imposed by the US government on a Chinese OEM [ZTE, involving a $25-30m hit on revenue, mostly in mobile, but including some infrastructure],” says senior VP & chief financial officer Kris Sennesael.

For fiscal third-quarter 2018 (to end-June), Skyworks hence expects revenue to fall to $875-900m (rather than being roughly flat, without losing the ZTE revenue). Nevertheless, with operating expenses remaining flat sequentially, gross margin should be flat to up, at 50.7-51%. Diluted earnings per share are expected to fall to $1.59.

“Based on new program ramps heading into the second half of the calendar year, we anticipate a resumption of sequential revenue growth in the September quarter with sustained momentum into the December period [following a traditional seasonal pattern for mobile and smartphones],” says Sennesael. In second-half 2018, further gross margin improvements towards the target model of 53% are expected.

See related items:

Skyworks’ quarterly revenue up 7% sequentially to a record $1.052bn

Skyworks’ quarterly revenue grows 9% to record $985m

Skyworks’ quarterly revenue grows by a more-than-expected 20% year-on-year to $900.8m

Skyworks’ quarterly revenue of $851.7m up a more-than-expected 10% year-on-year

Tags: Skyworks

Visit: www.skyworksinc.com

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