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Skyworks' (SWKS) Q1 Earnings Top Estimates, Revenues Rise Y/Y
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Skyworks Solutions (SWKS - Free Report) reported first-quarter fiscal 2022 non-GAAP earnings of $3.14 per share that beat the Zacks Consensus Estimate by 0.96% but declined 6.5% year over year.
Revenues of $1.51 billion surpassed the Zacks Consensus Estimate by 0.54% and were flat on a year-over-year basis. On a sequential basis, revenues increased 15%.
The company’s quarterly results benefited from an increased rate of 5G deployment. Mobile revenues (68% of total revenues) increased 12% sequentially but declined 13% year over year.
Broad markets (32% of total revenues) revenues surged 46% year over year and 23% 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.
Skyworks Solutions, Inc. Price, Consensus and EPS Surprise
The adoption of Skyworks’ Sky5 yields strong results as the platform powers 5G smartphone makers, including Samsung, Oppo, Vivo and Xiaomi.
Skyworks continues to see deployments accelerating, with 5G cellular subscriptions predicted to grow from the current 700 million to more than 4.4 billion by the year 2027. This presents a significant growth opportunity for the company in the long haul.
Operating Details
Non-GAAP gross margin expanded 10 basis points (bps) on a year-over-year basis and 20 bps sequentially to 51.2%.
Research & development expenses, as a percentage of revenues, increased 200 bps year over year to 10%.
Selling, general and administrative expenses increased 100 bps to 5.4% in the reported quarter.
Non-GAAP operating margin contracted 240 bps on a year-over-year basis to 38.8% in the reported quarter. On a sequential basis, operating margin expanded 160 bps.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash & cash equivalents and marketable securities were $1.02 billion compared with $1.03 billion as of Oct 1, 2021.
Long-term debt was $2.19 billion as of Dec 31, 2021, compared with $2.24 billion as of Oct 1, 2021. Skyworks repaid $50 million of term loan during the reported quarter.
Cash generated by operating activities was $581.7 million, unchanged from the figure reported in the previous quarter.
Skyworks repurchased 1.7 million shares for $269 million in the reported quarter.
Skyworks’ announced a quarterly dividend of 56 cents per share payable on Mar 15, 2022, to shareholders as of Feb 22.
Guidance
For the second quarter of fiscal 2022, Skyworks expects revenues between $1.30 billion and $1.360 billion, indicating growth of 13.5% from the figure reported in the year-ago quarter but a decline of 12% sequentially.
Growth in broad markets is expected to be stronger than in mobile markets. Nevertheless, Skyworks expects both segments to witness double-digit growth year over year in the second quarter of fiscal 2022.
Earnings are expected to be $2.62 per share at the mid-point of this revenue guidance, indicating growth of 11% from the figure reported in the year-ago quarter.
Skyworks expects gross margin between 50.75% and 51.25%. The company expects operating expenses between $186 million and $188 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
Skyworks’ shares have underperformed the Zacks Computer & Technology sector in the past year. SWKS’ shares are down 22.8% compared with the sector’s rise of 8.6%.
Airbnb (ABNB - Free Report) , Mandiant and Analog Devices (ADI - Free Report) are some better-ranked stocks that investors can consider from the broader sector. While both Airbnb and Mandiant sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb’s shares have underperformed the sector in the past year, declining 17.4%.
Airbnb is set to report fourth-quarter 2021 results on Feb 15.
Mandiant’s shares have underperformed the Zacks Computer & Technology sector in the past year, declining 27.9%.
MNDT is set to report fourth-quarter 2021 on Feb 8.
Analog Devices’ shares have outperformed the Zacks Computer & Technology sector in the past year, rising 10.3%.
ADI is set to report first-quarter fiscal 2022 results on Feb 16.
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Skyworks' (SWKS) Q1 Earnings Top Estimates, Revenues Rise Y/Y
Skyworks Solutions (SWKS - Free Report) reported first-quarter fiscal 2022 non-GAAP earnings of $3.14 per share that beat the Zacks Consensus Estimate by 0.96% but declined 6.5% year over year.
Revenues of $1.51 billion surpassed the Zacks Consensus Estimate by 0.54% and were flat on a year-over-year basis. On a sequential basis, revenues increased 15%.
The company’s quarterly results benefited from an increased rate of 5G deployment. Mobile revenues (68% of total revenues) increased 12% sequentially but declined 13% year over year.
Broad markets (32% of total revenues) revenues surged 46% year over year and 23% 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.
Skyworks Solutions, Inc. Price, Consensus and EPS Surprise
Skyworks Solutions, Inc. price-consensus-eps-surprise-chart | Skyworks Solutions, Inc. Quote
The adoption of Skyworks’ Sky5 yields strong results as the platform powers 5G smartphone makers, including Samsung, Oppo, Vivo and Xiaomi.
Skyworks continues to see deployments accelerating, with 5G cellular subscriptions predicted to grow from the current 700 million to more than 4.4 billion by the year 2027. This presents a significant growth opportunity for the company in the long haul.
Operating Details
Non-GAAP gross margin expanded 10 basis points (bps) on a year-over-year basis and 20 bps sequentially to 51.2%.
Research & development expenses, as a percentage of revenues, increased 200 bps year over year to 10%.
Selling, general and administrative expenses increased 100 bps to 5.4% in the reported quarter.
Non-GAAP operating margin contracted 240 bps on a year-over-year basis to 38.8% in the reported quarter. On a sequential basis, operating margin expanded 160 bps.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash & cash equivalents and marketable securities were $1.02 billion compared with $1.03 billion as of Oct 1, 2021.
Long-term debt was $2.19 billion as of Dec 31, 2021, compared with $2.24 billion as of Oct 1, 2021. Skyworks repaid $50 million of term loan during the reported quarter.
Cash generated by operating activities was $581.7 million, unchanged from the figure reported in the previous quarter.
Skyworks repurchased 1.7 million shares for $269 million in the reported quarter.
Skyworks’ announced a quarterly dividend of 56 cents per share payable on Mar 15, 2022, to shareholders as of Feb 22.
Guidance
For the second quarter of fiscal 2022, Skyworks expects revenues between $1.30 billion and $1.360 billion, indicating growth of 13.5% from the figure reported in the year-ago quarter but a decline of 12% sequentially.
Growth in broad markets is expected to be stronger than in mobile markets. Nevertheless, Skyworks expects both segments to witness double-digit growth year over year in the second quarter of fiscal 2022.
Earnings are expected to be $2.62 per share at the mid-point of this revenue guidance, indicating growth of 11% from the figure reported in the year-ago quarter.
Skyworks expects gross margin between 50.75% and 51.25%. The company expects operating expenses between $186 million and $188 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
Skyworks’ shares have underperformed the Zacks Computer & Technology sector in the past year. SWKS’ shares are down 22.8% compared with the sector’s rise of 8.6%.
Airbnb (ABNB - Free Report) , Mandiant and Analog Devices (ADI - Free Report) are some better-ranked stocks that investors can consider from the broader sector. While both Airbnb and Mandiant sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb’s shares have underperformed the sector in the past year, declining 17.4%.
Airbnb is set to report fourth-quarter 2021 results on Feb 15.
Mandiant’s shares have underperformed the Zacks Computer & Technology sector in the past year, declining 27.9%.
MNDT is set to report fourth-quarter 2021 on Feb 8.
Analog Devices’ shares have outperformed the Zacks Computer & Technology sector in the past year, rising 10.3%.
ADI is set to report first-quarter fiscal 2022 results on Feb 16.