Skyworks Solutions Is Headed Skywards

Skyworks Solutions (SWKS) delivered strong results for the fourth quarter. Skyworks delivered revenue of $880.8 million, beating the analyst estimates, and showing a growth of 23% from the previous year’s revenue of $718.2 million. The main reason behind the increased revenue is the rise in use of Skyworks products for the technology advancements within Media Services, Internet use, and Mobile connectivity.

A closer look at the metrics

Moving ahead, the Non-GAAP gross profit for the quarter went up to $440.1 million from $329.6 million for the fourth quarter, 2014.
Further, the gross margin went up 50% from 45.9% for the previous year’s same quarter.

Looking forward to income, the Non-GAAP operating income was $335.2 million for the quarter as against $235.7 million for the previous year’s same quarter and the operating margin was 38.1% against 32.8% for the fourth quarter, 2014. Additionally, the Non-GAAP net income scaled up to $296.1 million from $216.1 million for the fourth quarter, 2014.

Skyworks’ posted Non-GAAP Diluted earnings per share of $1.52, beating the analyst estimates, compared to $1.12 for the fourth quarter, 2014. The fact that the company has achieved not just the absolute growth but also the growth of significant margins is quite impressive.

Skyworks Tackling the competition…

The company in the OnHub Connected Home Gateway of Google has captured Bluetooth, Wi-Fi and ZigBee content with suite of 20 devices. The company has also expanded its presence in BTS platform of small-cell with content of $25.

Additionally, for upcoming Hyundai models, the company has secured power management functions and display backlight in LG infotainment centres. Skyworks has also supported, smartphone named Moto X with the help of with five devices.

In addition, Skyworks has acquired PMC Sierra for $11.60 per share, which will diversify company’s business for future growth.

Valuation

The company has trailing P/E ratio of 18.25 and forward P/E ratio of 10.39, showing the company’s rapid future growth. Skyworks has PEG ratio of 0.60, indicating that it will have to pay less for its future growth earnings. Further, Skyworks has Price/Sales ratio of 4.41 and Enterprise Value/Revenue of 4.03. In addition, the Current Ratio went down to 4.13 for the quarter, from 4.80 for the same period, last year.

Conclusion

To wrap up, Skyworks Solutions posted solid fourth quarter, 2015 results. The quarter’s revenue and Diluted earnings per share surpassed the expectations. In addition, the quarter posted increased revenue, gross profit, operating income, and net income. The Diluted earnings per share for the quarter went up to $1.52 from $1.12 for the fourth quarter, 2014. The forward P/E ratio shows company’s rapid future growth. The PEG ratio is 0.60.

Looking forward to first quarter, 2016, the company expects revenue in a range of $925 million- $930 million, Non-GAAP gross margin of 51% and Non-GAAP diluted earnings per share of $1.60 and also, the company has taken various steps to take the advantage of the growth opportunities.
Published on Nov 19, 2015
By Yaggyaseni Mittra

Copyrighted 2016. Content published with author's permission.

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