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Skyworks (SWKS) to Post Q3 Earnings: What's in the Offing?

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Skyworks Solutions (SWKS - Free Report) is slated to release third-quarter fiscal 2021 results on Jul 29.

For the third quarter, revenues are expected in the range of $1.075 billion to $1.125 billion (mid-point being $1.10 billion), representing revenue growth of 49% at the mid-point. Non-GAAP earnings are anticipated to be $2.13 per share at the mid-point of the revenue range, representing growth of 70% year over year.

The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $1.10 billion, which indicates an improvement of 49.4% from the year-ago quarter.

The consensus mark for earnings has been steady for the past 30 days at $2.13 per share, which suggests growth of 70.4% from the figure reported in the year-ago quarter.

Skyworks’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, delivering an earnings surprise of 23.8%, on average.

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote


Let’s see how things have shaped up for the upcoming announcement.

Factors Likely to Have Influenced Q3 Performance

Skyworks is riding on momentum in 5G and Wi-Fi 6 solutions that is likely to have driven its top line in the to-be-reported quarter. Demand continues to be high owing to increased need for high-speed connectivity amid the COVID-19-induced surge in remote-work, video-streaming and web-based learning trends.

Rapid deployment of 5G globally is a tailwind for the company. It continues to win deals from OEMs like Motorola, Samsung, OPPO, VIVO, and Xiaomi, which are expected to have benefited Skyworks’ prospects in the third quarter.

Newly released 3GPP standards have validated the extension of 5G technology into Internet of Things (IoT), Vehicle-to-everything (V2X) and other services. This is likely to have stoked demand for Skyworks’ 5G solutions in the quarter under review.

Solid demand uptick for 5G handsets, especially in China, is anticipated to have driven the company’s performance in the quarter to be reported.

Momentum in deal wins from various customers across industrial IoT, automotive, aerospace and defense verticals is anticipated to have continued in the fiscal third quarter.

Strong demand for the iPhone 12 family might have positively impacted revenue numbers in the quarter under review. Skyworks supplies radio frequency chips to Apple and derives a significant portion of its revenues from the latter.

Growing momentum for Skyworks’ bulk acoustic wave ("BAW") filters, especially in mobile and broad markets, is likely to have driven fiscal third-quarter top line. The company has been witnessing significant design wins for BAW-enabled devices.

This Zacks Rank #2 (Buy) company has been witnessing traction for its low-latency wireless audio platforms, supporting leading gaming headsets at Microsoft (MSFT - Free Report) , Sony and Google. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nonetheless, increasing expenses on product enhancements amid stiff competition from Qorvo (QRVO - Free Report) and Broadcom (AVGO - Free Report) in the radio frequency semiconductor market are anticipated to have limited Skyworks' margin expansion in the fiscal third quarter.

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