It has been about a month since the last earnings report for Skyworks Solutions (SWKS Quick QuoteSWKS - Free Report) . Shares have added about 3.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Skyworks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Skyworks' Q2 Earnings Beat Estimates, Revenues Down Y/Y

Skyworks Solutions reported second-quarter fiscal 2023 non-GAAP earnings of $2.02 per share, beating the Zacks Consensus Estimate by 0.5% but decreasing 23.2% year over year.

Revenues of $1.15 billion decreased 13.7% on a year-over-year basis.

Mobile revenues accounted for 60% of total revenues. Broad markets accounted for 40% of total revenues and benefited from strong automotive, infrastructure and industrial end-markets, as well as the continued global shift to WiFi 6E and 7.

Operating Details

Non-GAAP gross margin contracted 120 basis points (bps) on a year-over-year basis to 50% and 20 bps, sequentially.

Research & development expenses, as a percentage of revenues, increased 80 bps year over year to 12.9%.
 
Selling, general and administrative expenses increased 60 bps to 6.9% in the reported quarter.

Non-GAAP operating margin contracted 330 bps on a year-over-year basis to 33.5% in the reported quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2023, cash & cash equivalents and marketable securities were $1.06 billion compared with $992.6 million as of Dec 31, 2022.

Long-term debt was $1.99 billion as of Mar 31, 2023, down from $2.19 billion as of Dec 31, 2022.

Cash generated by operating activities was $411.7 million in the quarter under discussion compared with $773.4 million in the previous quarter.

Skyworks repurchased shares worth $9 million in the reported quarter. It also paid dividends worth $99 million.

Guidance

For the third quarter of fiscal 2023, the company expects revenues between $1.050 billion and $1.090 billion.

Gross margin is expected between 47% and 48%. Operating expenses are expected to be in the range of $183-$187 million.

Earnings are expected to be $1.67 per share at the mid-point of this revenue guidance.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -19.59% due to these changes.

VGM Scores

Currently, Skyworks has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Skyworks has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Skyworks belongs to the Zacks Semiconductors - Radio Frequency industry. Another stock from the same industry, Qorvo (QRVO Quick QuoteQRVO - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

Qorvo reported revenues of $632.7 million in the last reported quarter, representing a year-over-year change of -45.8%. EPS of $0.26 for the same period compares with $3.12 a year ago.

Qorvo is expected to post earnings of $0.15 per share for the current quarter, representing a year-over-year change of -93.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Qorvo. Also, the stock has a VGM Score of C.