53.2 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

Skyworks Solutions Soars on Latest Earnings

Chipmaker Skyworks Solutions Inc. in Irvine is heading into 2021 bolstered by strong quarterly earnings, a further push into 5G wireless communications and continued strong sales to Apple Inc.
Skyworks (Nasdaq: SWKS) on Jan. 28 said revenue in the three months ended Jan. 1 was $1.5 billion, up 69% compared with the same period a year ago, while diluted earnings rose 103% year-over-year to $3.05 per share.
Judging from the share price, Wall Street likes what it sees in Skyworks.
Shares in the company rose to about $185 apiece at the start of last week, for a market cap of almost $31 billion and a 21% increase since the beginning of the year.
“We believe takeaways are quite positive and can begin to reignite the stock entering year two of 5G smartphone uptake,” said B. Riley Financial analyst Craig Ellis in a research note.
Ellis sees an “attractive upside ahead” for the company’s stock.
Skyworks Chief Financial Officer Kris Sennesael told analysts in a conference call that the company’s “largest customer in the December quarter” accounted for approximately 70% of the Skyworks revenue, according to transcripts of the conversation.
While he didn’t specify Apple, a filing with the Securities and Exchange Commission said Apple accounted for more than half of Skyworks net revenue in the last two fiscal years.
He also emphasized that “the strength in the December quarter was not just with the large customer.”

‘Jamming’ in 2021
“Skyworks is jamming this year with 5G. Apple was over two-thirds of their business. They are dependent on them,” Chaim Siegel, the founder and head of U.S. equity research at Elazar Advisors LLC, told the Business Journal.
He added: “Maybe when non-smartphone wireless applications begin to overtake the smartphone market, Skyworks won’t be so dependent on Apple. But until then, that’s the deal. 2021 should be a big year for 5G.”
Apple (Nasdaq: AAPL) itself reported that sales jumped 21% year-over-year to $111.4 billion in three-month the period ended Dec. 26.
Skyworks also caught investors’ attention with its announcement of a new $2 billion stock repurchase program.
Sennesael said the buyback program reflects “management’s ability to consistently produce strong free cash flow, allowing us to leverage share repurchases and dividends to generate higher stockholder returns.”
Sennesael said Skyworks “China business in the December quarter was up double digits sequentially.”
“We’ve got a China position now that I think is going to inflect higher as the content there on a relative basis is still lower than it is in other markets,” CEO Liam Griffin told analysts. “So, there’s a great opportunity to move.”
He said the demand for always-on connectivity is accelerating and extending into new applications, including telemedicine, high speed video conferencing, remote learning, autonomous transport, essential services for the infrastructure markets, store-to-door delivery, and touchless commerce.

Samsung, Oppo
Griffin ticked off some of the latest Skyworks successes, saying the company:
n Accelerated the ramp-up of the Sky5 portfolio, supporting the next wave of 5G launches at Samsung, Oppo, Vivo, Xiaomi and other Tier 1s.
n Partnered with Taiwanese company ASUS, delivering the world's first Wi-Fi 6E connected home router.
n Shipped Wi-Fi 6 solutions for access points at top network OEMs (original equipment manufacturers) including Cisco, NetGear, CenturyLink and Aruba.
“While smartphones were the first to embrace 5G, the performance gains will power a broad set of use cases, extending into billions of IoT devices,” Griffin told the post-earnings release conference call.
Separately, Skyworks board chairman David Aldrich was recently named to the board of automobile technology company Indie Semiconductor of Aliso Viejo. Indie is aiming for an IPO that would value the company at around $1.4 billion. 

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal
-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-