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Skyworks (SWKS) Q2 Earnings Beat Estimates, Revenues Down Y/Y
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Skyworks Solutions (SWKS - Free Report) reported non-GAAP earnings of $1.55 per share in second-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 23.3% year over year.
Revenues of $1.04 billion dropped 9.3% on a year-over-year basis and missed the consensus mark by 0.01%.
Mobile revenues contributed nearly 66% to total revenues and declined 19% sequentially.
In the second quarter of fiscal 2024, SWKS provided integrated platforms to the top 5G smartphone OEMs, including flagship and mid-tier releases for Samsung, Google and Oppo.
Skyworks Solutions, Inc. Price, Consensus and EPS Surprise
Skyworks launched new initiatives in automotive, including infotainment systems, traction inverters, cloud-enhanced driver-assist and CV2X on-board units.
Skyworks also highlighted its solid portfolio of Wi-Fi 6E and Wi-Fi 7 design wins in the edge IoT segment.
Broad markets contributed nearly 34% to total revenues and up 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 500 basis points (bps) on a year-over-year basis to 45%.
Research & development expenses, as a percentage of revenues, increased 190 bps year over year to 14.8%.
Selling, general and administrative expenses increased 50 bps to 7.3% in the reported quarter.
Non-GAAP operating margin contracted 680 bps on a year-over-year basis to 26.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash & cash equivalents and marketable securities were $1.2 billion compared with $1.04 billion as of Dec 29, 2023.
Long-term debt remained steady at $993.6 million as of Mar 29, 2024, compared with $993.2 million as of Dec 29, 2023.
Cash generated by operating activities was $300 million in the quarter under discussion compared with $775 million in the previous quarter.
Free cash flow was $273 million, with a 26% free cash flow margin.
Skyworks paid out dividends worth $109 million in the reported quarter.
Guidance
For the third quarter of fiscal 2024, the company currently expects revenues to be $900 million plus or minus 2%. Earnings are expected to be $1.21 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 45% and 47%. Operating expenses are expected to be in the range of $192-$198 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
SWKS’s shares have returned 1% compared with the Zacks Computer and Technology sector’s rise of 39.7% year to date.
Here are some better-ranked stocks worth considering in the broader sector.
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Skyworks (SWKS) Q2 Earnings Beat Estimates, Revenues Down Y/Y
Skyworks Solutions (SWKS - Free Report) reported non-GAAP earnings of $1.55 per share in second-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 23.3% year over year.
Revenues of $1.04 billion dropped 9.3% on a year-over-year basis and missed the consensus mark by 0.01%.
Mobile revenues contributed nearly 66% to total revenues and declined 19% sequentially.
In the second quarter of fiscal 2024, SWKS provided integrated platforms to the top 5G smartphone OEMs, including flagship and mid-tier releases for Samsung, Google and Oppo.
Skyworks Solutions, Inc. Price, Consensus and EPS Surprise
Skyworks Solutions, Inc. price-consensus-eps-surprise-chart | Skyworks Solutions, Inc. Quote
Skyworks launched new initiatives in automotive, including infotainment systems, traction inverters, cloud-enhanced driver-assist and CV2X on-board units.
Skyworks also highlighted its solid portfolio of Wi-Fi 6E and Wi-Fi 7 design wins in the edge IoT segment.
Broad markets contributed nearly 34% to total revenues and up 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 500 basis points (bps) on a year-over-year basis to 45%.
Research & development expenses, as a percentage of revenues, increased 190 bps year over year to 14.8%.
Selling, general and administrative expenses increased 50 bps to 7.3% in the reported quarter.
Non-GAAP operating margin contracted 680 bps on a year-over-year basis to 26.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash & cash equivalents and marketable securities were $1.2 billion compared with $1.04 billion as of Dec 29, 2023.
Long-term debt remained steady at $993.6 million as of Mar 29, 2024, compared with $993.2 million as of Dec 29, 2023.
Cash generated by operating activities was $300 million in the quarter under discussion compared with $775 million in the previous quarter.
Free cash flow was $273 million, with a 26% free cash flow margin.
Skyworks paid out dividends worth $109 million in the reported quarter.
Guidance
For the third quarter of fiscal 2024, the company currently expects revenues to be $900 million plus or minus 2%. Earnings are expected to be $1.21 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 45% and 47%. Operating expenses are expected to be in the range of $192-$198 million.
Zacks Rank & Stocks to Consider
Skyworks currently carries a Zacks Rank #3 (Hold).
SWKS’s shares have returned 1% compared with the Zacks Computer and Technology sector’s rise of 39.7% year to date.
Here are some better-ranked stocks worth considering in the broader sector.
Arista Networks (ANET - Free Report) , Criteo (CRTO - Free Report) and Dell Technologies (DELL - Free Report) are some better-ranked stocks that investors can consider in the broader sector. ANET and CRTO sport a Zacks Rank #1 (Strong Buy), while DELL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have surged 60.2% year to date. ANET is set to report its first-quarter 2024 results on May 7.
Criteo’s shares have gained 12.8% year to date. CRTO is set to report first-quarter 2024 results on May 2.
Dell Technologies’ shares have skyrocketed 184.4% year to date. DELL is set to report its first-quarter fiscal 2025 results on May 30.