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Factors Setting the Tone for Skyworks' (SWKS) Q2 Earnings
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Skyworks Solutions, Inc. (SWKS - Free Report) is slated to report second-quarter fiscal 2020 results on May 4.
Per the business update provided on Apr 14, Skyworks noted revenues of $766.1 million in the fiscal second quarter. Moreover, the company now expects non-GAAP earnings to be $1.34 compared with the previous guidance of $1.46 due to the impact of COVID-19.
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $765.7 million, which indicates a decline of 5.5% from the year-ago quarter’s reported figure.
The consensus mark for earnings has been steady over the past 7 days at $1.34, suggesting a decline of 8.8% from the prior-year reported figure.
Notably, the company has a trailing four-quarter positive earnings surprise of 1.68%, on average.
Let’s see how things have shaped up prior to this announcement.
Skyworks’ Sky5 platform is being used to accelerate the adoption of 5G technology across various end markets. Thus, the platform’s growing adoption is likely to have driven top-line growth in the to-be-reported quarter.
For instance, the ramping up of production of 5G enabled smartphones is boosting adoption of the Sky5 platform. Notably, the platform has been powering smartphone launches at Oppo, Xiaomi, Vivo and Samsung. This is expected to get in reflected in second-quarter results.
Moreover, Skywork’s baseband agnostic solutions are witnessing strong traction among major chipset suppliers. MediaTek, Qualcomm and Samsung selected the company’s solutions in the previous quarter. This is likely to have had a positive impact on the company’s performance in the to-be-reported quarter, owing to expanding filter capabilities in temperature controlled- surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW).
The company’s infrastructure business has also been witnessing robust traction. It witnessed automotive design wins with Continental, Renault and Nissan as well as industrial design wins with Honeywell, GE and Bosch in the fiscal first quarter. The momentum is expected to have continued in the second quarter owing to Skyworks’ strong portfolio of connectivity solutions.
Further, the launch of Skyworks’ Wi-Fi 6 platforms is anticipated to have aided the company in expanding its clientele. Notably, the company secured deals with major industry players like AT&T, Cisco, Netgear, ARRIS and Aruba in the previous quarter.
However, the global coronavirus outbreak has disrupted supply chains worldwide and slowed the deployment of 5G in several countries. This is likely to have negatively impacted the company’s performance in the quarter to be reported.
Additionally, growing expenses on product development amid stiff competition from Qorvo and Broadcom in the radio frequency semiconductor market is likely to have limited margin expansion in the second quarter.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Skyworks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Skyworks has an Earnings ESP of 0.00% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies that have the right combination of elements to post an earnings beat this time around.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #3.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Factors Setting the Tone for Skyworks' (SWKS) Q2 Earnings
Skyworks Solutions, Inc. (SWKS - Free Report) is slated to report second-quarter fiscal 2020 results on May 4.
Per the business update provided on Apr 14, Skyworks noted revenues of $766.1 million in the fiscal second quarter. Moreover, the company now expects non-GAAP earnings to be $1.34 compared with the previous guidance of $1.46 due to the impact of COVID-19.
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $765.7 million, which indicates a decline of 5.5% from the year-ago quarter’s reported figure.
The consensus mark for earnings has been steady over the past 7 days at $1.34, suggesting a decline of 8.8% from the prior-year reported figure.
Notably, the company has a trailing four-quarter positive earnings surprise of 1.68%, on average.
Let’s see how things have shaped up prior to this announcement.
Skyworks Solutions, Inc. Price and EPS Surprise
Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote
Factors to Consider
Skyworks’ Sky5 platform is being used to accelerate the adoption of 5G technology across various end markets. Thus, the platform’s growing adoption is likely to have driven top-line growth in the to-be-reported quarter.
For instance, the ramping up of production of 5G enabled smartphones is boosting adoption of the Sky5 platform. Notably, the platform has been powering smartphone launches at Oppo, Xiaomi, Vivo and Samsung. This is expected to get in reflected in second-quarter results.
Moreover, Skywork’s baseband agnostic solutions are witnessing strong traction among major chipset suppliers. MediaTek, Qualcomm and Samsung selected the company’s solutions in the previous quarter. This is likely to have had a positive impact on the company’s performance in the to-be-reported quarter, owing to expanding filter capabilities in temperature controlled- surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW).
The company’s infrastructure business has also been witnessing robust traction. It witnessed automotive design wins with Continental, Renault and Nissan as well as industrial design wins with Honeywell, GE and Bosch in the fiscal first quarter. The momentum is expected to have continued in the second quarter owing to Skyworks’ strong portfolio of connectivity solutions.
Further, the launch of Skyworks’ Wi-Fi 6 platforms is anticipated to have aided the company in expanding its clientele. Notably, the company secured deals with major industry players like AT&T, Cisco, Netgear, ARRIS and Aruba in the previous quarter.
However, the global coronavirus outbreak has disrupted supply chains worldwide and slowed the deployment of 5G in several countries. This is likely to have negatively impacted the company’s performance in the quarter to be reported.
Additionally, growing expenses on product development amid stiff competition from Qorvo and Broadcom in the radio frequency semiconductor market is likely to have limited margin expansion in the second quarter.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Skyworks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Skyworks has an Earnings ESP of 0.00% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies that have the right combination of elements to post an earnings beat this time around.
Pixelworks, Inc. (PXLW - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #3.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>