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Why Is Skyworks (SWKS) Down 0.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 0.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Skyworks due for a breakout? 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 non-GAAP earnings of $1.55 per share in second-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 23.3% year over year.
Revenues of $1.04 billion dropped 9.3% on a year-over-year basis and missed the consensus mark by 0.01%.
Mobile revenues contributed nearly 66% to total revenues and declined 19% sequentially.
In the second quarter of fiscal 2024, SWKS provided integrated platforms to the top 5G smartphone OEMs, including flagship and mid-tier releases for Samsung, Google and Oppo.
Skyworks launched new initiatives in automotive, including infotainment systems, traction inverters, cloud-enhanced driver-assist and CV2X on-board units.
Skyworks also highlighted its solid portfolio of Wi-Fi 6E and Wi-Fi 7 design wins in the edge IoT segment.
Broad markets contributed nearly 34% to total revenues and up 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 500 basis points (bps) on a year-over-year basis to 45%.
Research & development expenses, as a percentage of revenues, increased 190 bps year over year to 14.8%.
Selling, general and administrative expenses increased 50 bps to 7.3% in the reported quarter.
Non-GAAP operating margin contracted 680 bps on a year-over-year basis to 26.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash & cash equivalents and marketable securities were $1.2 billion compared with $1.04 billion as of Dec 29, 2023.
Long-term debt remained steady at $993.6 million as of Mar 29, 2024, compared with $993.2 million as of Dec 29, 2023.
Cash generated by operating activities was $300 million in the quarter under discussion compared with $775 million in the previous quarter.
Free cash flow was $273 million, with a 26% free cash flow margin.
Skyworks paid out dividends worth $109 million in the reported quarter.
Guidance
For the third quarter of fiscal 2024, the company currently expects revenues to be $900 million plus or minus 2%. Earnings are expected to be $1.21 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 45% and 47%. Operating expenses are expected to be in the range of $192-$198 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.58% due to these changes.
VGM Scores
Currently, Skyworks has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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.
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Why Is Skyworks (SWKS) Down 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 0.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Skyworks due for a breakout? 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 non-GAAP earnings of $1.55 per share in second-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 23.3% year over year.
Revenues of $1.04 billion dropped 9.3% on a year-over-year basis and missed the consensus mark by 0.01%.
Mobile revenues contributed nearly 66% to total revenues and declined 19% sequentially.
In the second quarter of fiscal 2024, SWKS provided integrated platforms to the top 5G smartphone OEMs, including flagship and mid-tier releases for Samsung, Google and Oppo.
Skyworks launched new initiatives in automotive, including infotainment systems, traction inverters, cloud-enhanced driver-assist and CV2X on-board units.
Skyworks also highlighted its solid portfolio of Wi-Fi 6E and Wi-Fi 7 design wins in the edge IoT segment.
Broad markets contributed nearly 34% to total revenues and up 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 500 basis points (bps) on a year-over-year basis to 45%.
Research & development expenses, as a percentage of revenues, increased 190 bps year over year to 14.8%.
Selling, general and administrative expenses increased 50 bps to 7.3% in the reported quarter.
Non-GAAP operating margin contracted 680 bps on a year-over-year basis to 26.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash & cash equivalents and marketable securities were $1.2 billion compared with $1.04 billion as of Dec 29, 2023.
Long-term debt remained steady at $993.6 million as of Mar 29, 2024, compared with $993.2 million as of Dec 29, 2023.
Cash generated by operating activities was $300 million in the quarter under discussion compared with $775 million in the previous quarter.
Free cash flow was $273 million, with a 26% free cash flow margin.
Skyworks paid out dividends worth $109 million in the reported quarter.
Guidance
For the third quarter of fiscal 2024, the company currently expects revenues to be $900 million plus or minus 2%. Earnings are expected to be $1.21 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 45% and 47%. Operating expenses are expected to be in the range of $192-$198 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.58% due to these changes.
VGM Scores
Currently, Skyworks has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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.