Skyworks Solutions (SWKS - Free Report) reported fourth-quarter fiscal 2023 non-GAAP earnings of $2.20 per share, comfortably beating the Zacks Consensus Estimate by 4.76% but decreasing 27.2% year over year.
Revenues of $1.219 billion decreased 13.4% on a year-over-year basis but beat the consensus mark by 0.25%. Sequentially, revenues increased 14%.
Mobile revenues accounted for roughly 65% of total revenues and increased 25% sequentially. Broad markets accounted for nearly 35% of total revenues and suffered from high inventory levels.
The company’s shares have gained 20.9% year to date, underperforming the Zacks Computer & Technology sector’s growth of 38.5%.
Operating Details
Non-GAAP gross margin contracted 410 basis points (bps) on a year-over-year basis to 47.1%, primarily due to factory underutilization due to the right-sizing of inventory levels.
Research & development expenses, as a percentage of revenues, increased 140 bps year over year to 12%.
Selling, general and administrative expenses decreased 20 bps to 6% in the reported quarter.
Non-GAAP operating margin contracted 490 bps on a year-over-year basis to 32.6% in the reported quarter.
Balance Sheet & Cash Flow
As of Sep 29, 2023, cash & cash equivalents and marketable securities were $738.5 million compared with $739.5 million as of Jun 30, 2023.
Long-term debt was $1.29 billion as of Sep 29, 2023, down from $1.49 billion as of Jun 30, 2023. It repaid $200 million of term loan in the reported quarter.
Cash generated by operating activities was $365.7 million in the quarter under discussion compared with $305.7 million in the previous quarter.
Skyworks paid dividends worth $108 million.
Guidance
For the first quarter of fiscal 2024, the company currently expects revenues between $1.175 billion and $1.225 billion. Earnings are expected to be $1.95 per share at the mid-point of this revenue guidance.
Gross margin is expected to be between 46% and 47%. Operating expenses are expected to be in the range of $193-$197 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
NetEase (NTES - Free Report) , NVIDIA (NVDA - Free Report) and Model N (MODN - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NetEase shares have gained 51.1% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
NVIDIA shares have returned 197.5% year to date. NVDA is set to report its third-quarter fiscal 2024 results on Nov 21.
Model N shares have declined 39.2% year to date. MODN is set to report its fourth-quarter fiscal 2023 results on Nov 9.
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Skyworks Solutions (SWKS - Free Report) reported fourth-quarter fiscal 2023 non-GAAP earnings of $2.20 per share, comfortably beating the Zacks Consensus Estimate by 4.76% but decreasing 27.2% year over year.
Revenues of $1.219 billion decreased 13.4% on a year-over-year basis but beat the consensus mark by 0.25%. Sequentially, revenues increased 14%.
Mobile revenues accounted for roughly 65% of total revenues and increased 25% sequentially. Broad markets accounted for nearly 35% of total revenues and suffered from high inventory levels.
The company’s shares have gained 20.9% year to date, underperforming the Zacks Computer & Technology sector’s growth of 38.5%.
Operating Details
Non-GAAP gross margin contracted 410 basis points (bps) on a year-over-year basis to 47.1%, primarily due to factory underutilization due to the right-sizing of inventory levels.
Research & development expenses, as a percentage of revenues, increased 140 bps year over year to 12%.
Selling, general and administrative expenses decreased 20 bps to 6% in the reported quarter.
Non-GAAP operating margin contracted 490 bps on a year-over-year basis to 32.6% in the reported quarter.
Balance Sheet & Cash Flow
As of Sep 29, 2023, cash & cash equivalents and marketable securities were $738.5 million compared with $739.5 million as of Jun 30, 2023.
Long-term debt was $1.29 billion as of Sep 29, 2023, down from $1.49 billion as of Jun 30, 2023. It repaid $200 million of term loan in the reported quarter.
Cash generated by operating activities was $365.7 million in the quarter under discussion compared with $305.7 million in the previous quarter.
Skyworks paid dividends worth $108 million.
Guidance
For the first quarter of fiscal 2024, the company currently expects revenues between $1.175 billion and $1.225 billion. Earnings are expected to be $1.95 per share at the mid-point of this revenue guidance.
Gross margin is expected to be between 46% and 47%. Operating expenses are expected to be in the range of $193-$197 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
NetEase (NTES - Free Report) , NVIDIA (NVDA - Free Report) and Model N (MODN - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NetEase shares have gained 51.1% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
NVIDIA shares have returned 197.5% year to date. NVDA is set to report its third-quarter fiscal 2024 results on Nov 21.
Model N shares have declined 39.2% year to date. MODN is set to report its fourth-quarter fiscal 2023 results on Nov 9.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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