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Skyworks (SWKS) Down 5.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Skyworks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Skyworks’ Q2 Earnings Top Estimates, Revenues Up Y/Y
Skyworks Solutions reported second-quarter fiscal 2022 non-GAAP earnings of $2.63 per share that beat the Zacks Consensus Estimate by 0.38% and improved 11% year over year.
Revenues of $1.34 billion surpassed the Zacks Consensus Estimate by 0.48%. The top line increased 14% on a year-over-year basis. Revenues were driven by the growth of Tier 1 mobile and a diversified customer base.
The company’s quarterly results benefited from an increased rate of 5G deployment. However, business in the mobile segment was negatively impacted by the global supply chain issues and continued COVID restrictions.
Broad markets revenues of $523 million (39% of total revenues) surged 36% year over year and 10% sequentially, driven by strong demand for 5G, IoT, automotive and wireless infrastructure.
The acquisition of the Infrastructure and Automotive business of Silicon Labs helped in expanding the customer base during the reported quarter.
The adoption of Skyworks’ Sky5 yielded strong results as the platform supports OEMs, including Google and Samsung.
Operating Details
Gross profit of $683 million resulted in non-GAAP gross margin expanding by 40 basis points (bps) on a year-over-year basis to 51.2%.
Research & development expenses, as a percentage of revenues, increased 90 bps year over year to 12%.
Selling, general and administrative expenses increased 20 bps to 6.2% in the reported quarter.
Non-GAAP operating margin contracted 80 bps on a year-over-year basis to 36.8% in the reported quarter.
Balance Sheet & Cash Flow
As of Apr 1, 2022, cash & cash equivalents and marketable securities were $778 million compared with $1.02 billion as of Dec 31, 2021.
Long-term debt was $2.19 billion as of Apr 1, 2021, flat with the prior quarter.
Cash generated by operating activities was $393 million in the quarter under discussion compared with $616 million in the previous quarter.
Skyworks repurchased 3 million shares for $418 million in the reported quarter.
Skyworks’ announced a quarterly dividend of 56 cents per share payable on Jun 14, 2022, to shareholders as of May 24.
Guidance
For the third quarter of fiscal 2022, Skyworks expects revenues between $1.20 billion and $1.260 billion, indicating growth of 10% from the year-ago quarter.
Growth in broad markets is expected to be stronger in mobile markets. Nevertheless, Skyworks expects both segments to witness double-digit growth year over year in the third quarter of fiscal 2022.
Earnings are expected to be $2.32 per share at the mid-point of this revenue guidance, indicating growth of 10% from the year-ago quarter.
Skyworks expects gross margin between 50.75% and 51.25%. The company expects operating expenses between $190 million and $192 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.46% due to these changes.
VGM Scores
Currently, Skyworks has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Skyworks (SWKS) Down 5.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Skyworks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Skyworks’ Q2 Earnings Top Estimates, Revenues Up Y/Y
Skyworks Solutions reported second-quarter fiscal 2022 non-GAAP earnings of $2.63 per share that beat the Zacks Consensus Estimate by 0.38% and improved 11% year over year.
Revenues of $1.34 billion surpassed the Zacks Consensus Estimate by 0.48%. The top line increased 14% on a year-over-year basis. Revenues were driven by the growth of Tier 1 mobile and a diversified customer base.
The company’s quarterly results benefited from an increased rate of 5G deployment. However, business in the mobile segment was negatively impacted by the global supply chain issues and continued COVID restrictions.
Broad markets revenues of $523 million (39% of total revenues) surged 36% year over year and 10% sequentially, driven by strong demand for 5G, IoT, automotive and wireless infrastructure.
The acquisition of the Infrastructure and Automotive business of Silicon Labs helped in expanding the customer base during the reported quarter.
The adoption of Skyworks’ Sky5 yielded strong results as the platform supports OEMs, including Google and Samsung.
Operating Details
Gross profit of $683 million resulted in non-GAAP gross margin expanding by 40 basis points (bps) on a year-over-year basis to 51.2%.
Research & development expenses, as a percentage of revenues, increased 90 bps year over year to 12%.
Selling, general and administrative expenses increased 20 bps to 6.2% in the reported quarter.
Non-GAAP operating margin contracted 80 bps on a year-over-year basis to 36.8% in the reported quarter.
Balance Sheet & Cash Flow
As of Apr 1, 2022, cash & cash equivalents and marketable securities were $778 million compared with $1.02 billion as of Dec 31, 2021.
Long-term debt was $2.19 billion as of Apr 1, 2021, flat with the prior quarter.
Cash generated by operating activities was $393 million in the quarter under discussion compared with $616 million in the previous quarter.
Skyworks repurchased 3 million shares for $418 million in the reported quarter.
Skyworks’ announced a quarterly dividend of 56 cents per share payable on Jun 14, 2022, to shareholders as of May 24.
Guidance
For the third quarter of fiscal 2022, Skyworks expects revenues between $1.20 billion and $1.260 billion, indicating growth of 10% from the year-ago quarter.
Growth in broad markets is expected to be stronger in mobile markets. Nevertheless, Skyworks expects both segments to witness double-digit growth year over year in the third quarter of fiscal 2022.
Earnings are expected to be $2.32 per share at the mid-point of this revenue guidance, indicating growth of 10% from the year-ago quarter.
Skyworks expects gross margin between 50.75% and 51.25%. The company expects operating expenses between $190 million and $192 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.46% due to these changes.
VGM Scores
Currently, Skyworks has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.