Skyworks Delivers Modest Earnings Beat In 2Q

Skyworks Solutions (SWKS) reported fiscal 2Q revenues of $1.172 billion, a jump of 53% year-on-year that came in ahead of analysts’ estimate of $1.15 billion. The analog semiconductor company reported non-GAAP diluted EPS of $2.37 per share versus consensus estimate of $2.35.

President and CEO of Skyworks Solutions, Liam K. Griffin said, “Skyworks’ record second quarter results reflect sustained leadership across a rapidly expanding set of end markets and customers, supported by our cutting-edge technologies and world-class manufacturing facilities. Importantly, our broad markets portfolio continues to gain momentum, with strong sequential and year-over-year growth.”

“Moving forward, our core business combined with our pending acquisition of the Infrastructure and Automotive business of Silicon Labs position Skyworks to capture an outsized portion of the opportunities that lie ahead,” Griffin added.

In the fiscal third quarter, SWKS anticipates revenues to grow 49% year-on-year to the midpoint of its range of $1.075 billion to $1.125 billion and as a result, expects non-GAAP diluted EPS of $2.13, a rise of 70% year-on-year.

The company also declared a cash dividend of $0.50 per share of common stock, payable on June 8 to shareholders of record as on May 18. (See Skyworks Solutions stock analysis on TipRanks)

Shares of SWKS have dropped 5% in the past five days.

Following the earnings, Susquehanna analyst Christopher Rolland reiterated a Hold and a price target of $190 on the stock. This implies almost 5% upside potential over the next 12 months.

Rolland noted, “After one of the greatest semis beats in recent memory last quarter (Dec), admittedly this modest beat and raise almost looks like a miss in contrast. But we note the company still posted more than +50% growth year-over-year, and remains “in the ballpark” for similar full-year growth.”

“While not totally immune to supply constraints, as the company does rely on some third parties for parts of their supply chain, the company is faring better than most as they do much of their own production in-house. In short, we believe Skyworks offers one of the best 5G stories in semis, but remain Neutral as we wait for a better entry and valuation,” Rolland added.

Overall, consensus among analysts is that SWKS is a Moderate Buy based on 11 Buys and 6 Holds. The average analyst price target of $213.13 implies upside potential of about 17.5% from current levels.

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