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Skyworks' (SWKS) Q3 Earnings Beat, Revenues Increase Y/Y

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Skyworks Solutions (SWKS - Free Report) reported third-quarter fiscal 2021 non-GAAP earnings of $2.15 per share that beat the Zacks Consensus Estimate by 0.9% and surged 72% year over year.

Revenues of $1.12 billion surpassed the Zacks Consensus Estimate by 1.4% and soared 51.5% on a year-over-year basis.

The company’s quarterly results benefited from increased rate of 5G deployment. Mobile revenues soared 52% year over year. Broad markets revenues surged 50% year over year, driven by strong demand for IoT solutions, including Wi-Fi 6 and 6E, and smart audio, as well as emerging use cases in industrial and automotive markets.

Expanding User and Partner Base

Adoption of Skyworks’ Sky5 remains strong as the platform powers upcoming smartphone launches from Alphabet’s (GOOGL - Free Report) Google as well as Oppo, Vivo and Xiaomi.

Facebook (FB - Free Report) is using Wi-Fi front-end modules from Skyworks for its next-gen Portal devices. The company ramped up Wi-Fi 6 and 6E platforms at Altice, Charter Communications (CHTR - Free Report) and Aruba Networks.
 

Skyworks Solutions, Inc. Price, Consensus and EPS Surprise

Skyworks Solutions, Inc. Price, Consensus and EPS Surprise

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

 

Skyworks partnered with Linksys to introduce the market’s first Wi-Fi 6E mesh network system. The company launched connected home and security solutions at Honeywell during the reported quarter.

The company shipped cognitive audio platforms to Samsung and Vizio for their home theater systems. Skyworks platform was selected by Peloton for its home fitness applications.

Operating Details

Non-GAAP gross margin expanded 50 basis points (bps) on a year-over-year basis to 50.6%.

Research & development expenses, as percentage of revenues, declined 420 basis points (bps) year over year to 11.7%.

Selling, general and administrative expenses increased 20 bps to 7.6% in the reported quarter.

Non-GAAP operating margin expanded 490 bps on a year-over-year basis to 36.1% in the reported quarter.

Balance Sheet & Cash Flow

As of Jul 2, 2021, cash & cash equivalents and marketable securities were $2.98 billion compared with $1.42 billion as of Apr 2, 2021.

Long term debt was $1.49 billion as of Jul 2, 2021.

Cash generated by operating activities was $272.9 million compared with $615.7 million in the previous quarter.

Skyworks’ board raised dividend by 12% to 56 cents per share payable on Sep 7, 2021, to shareholders as of Aug 17.

During the quarter, the company completed acquisition of the Infrastructure and Automotive business of Silicon Labs.

Guidance

For the fourth quarter of fiscal 2021, Skyworks expects revenues between $1.270 billion and $1.330 billion, indicating growth of 36% from the figure reported in the year-ago quarter. Earnings are expected to be $2.53 per share, indicating growth of 37% from the figure reported in the year-ago quarter.

This Zacks Rank #2 (Buy) company expects gross margin to be in the range of 51% to 51.5%. Operating expenses are expected to be $180-$183 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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