Skyworks Solutions (SWKS) Will Soar Higher

Skyworks Solutions (SWKS) announced second quarter ended April 1, 2016 total revenue of $775.1 million, up 2 percent year-over-year from $762.1 million during the same period last year and in line with the company’s guidance for the quarter. Going forward, the company estimates third quarter of 2016 revenue of about $750 million.

A strong performer

Skyworks declared second quarter of 2016 non-GAAP operating income of $285.0 million or $1.25 per diluted share, $0.01 above the guidance for the quarter and an increase of 10 percent year-over-year from $258.9 million or $1.15 per diluted share during the second quarter of fiscal year 2015.
Moving ahead, third quarter of fiscal 2016 non-GAAP diluted EPS is estimated to be $1.21.

The global semiconductor major reported slight year-over-year expansion in both its top and bottom line primarily driven by the notable customer traction for the company’s innovative set of wireless products and technology solutions.

Skyworks is constantly focused on delivering attractive top line and bottom line growths by impressively managing and controlling the non-core expenditures while delivering significant shareholder returns and in line with its continued commitment to deliver profitability with growth.

Importantly, The Board of Directors at Skyworks Solutions Inc. recently declared $0.26 per share of quarterly cash dividend on the company’s common stock to be paid on June 2, 2016 to all the key stakeholders as of May 12, 2016 and in line with its continued commitment to deliver attractive shareholder returns.

The ongoing focus of Skyworks on improving its overall financial position by minimizing the non-core expenses while preserving cash to be used in daily growth operations and returning a majority of the invested capital to the shareholders in the form of dividends and planned share repurchases.

Product innovation is robust

Skyworks strategically delivered an innovative front-end solution designed for LTE Cat-M (Machine-to-Machine) usages. It supported a major enterprise access point arrangement of Cisco through 16 key analog solutions. The semiconductor company allowed the functionality of GPS industrial tracking machines of Iotera while leveraging connectivity units to power Liberty and Arris international set-top boxes.

Further, Skyworks partnered with a key infrastructure enabler to successfully and commercially implement the world’s first Gigabit LTE mechanism. The company also introduced SkyBlue which is a ground-breaking technology for improving the efficiency and RF power abilities of front-end solutions. Skyworks uniquely supported a P9 leading LTE platform of Huawei through 10 solutions while adding additional OEMs by utilizing the leading integrated platform called SkyOne. Also, the wireless technology behemoth attractively grew blended content throughout Galaxy S7 smartphones of Samsung by about 20 percent while supporting advanced technology introductions at ZTE, Xiaomi, Vivo, OPPO and Lenovo.

The uniquely developed technology partnerships with other key global OEMs is believed to enhance the company’s already robust portfolio of wireless technology products and solutions while encouraging it to expand the set of superior wireless technology solutions and attracting several other key investors through timely dividend payments.

Going forward, Skyworks seems extremely well-positioned to increasingly capture new growth opportunities by continuing to capitalize on the in-demand Internet of Things and superior connectivity trends through uniquely delivering improved-value solutions having enhanced functionality and performance all through undiscovered markets, advanced applications and key customers. The key technology company reported robust second quarter financial results mainly driven by its rising diversification and expanding portfolio of differentiated products.

Recently, Skyworks attractively launched its advanced SkyLiTE™ 2.0 front-end technology solution for LTE devices in order to address carrier aggregation problems through a highly cost-optimized platform.  In addition, Skyworks declared a pack of advanced high-performance amplifiers for catering to the increasingly expanding small cell arrangement market.  Moving ahead, Skyworks is focused on successfully capitalizing on huge market demand for notably integrated networking devices by strategically launching superior Wi-Fi solutions to improve Smartphone performance and expand connectivity range.

The continued and timely introductions of advanced wireless solutions for key OEMs and other clients is believed to drive sustainable long-term company growth while delivering attractive shareholder returns.


Overall, the investors are advised to “Hold” their position in Skyworks Solutions Inc. considering the company’s significant long-term growth prospects being supported by a robust financial position with notable total cash of $1.18 billion and no debt, encouraging the company to make future growth investments. The profit margin of 29.48% seems attractive. However, the PEG ratio of 0.62 signifies somewhat slower company growth compared to solid industry’s growth average of 1.40.

Published on Jun 13, 2016
By Vinay Singh

Copyrighted 2016. Content published with author's permission.

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