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Skyworks (SWKS) Down 6.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 6.1% 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 the most recent earnings report in order to get a better handle on the important drivers.
Skyworks' Q3 Earnings Meet Estimates, Revenues Down Y/Y
Skyworks Solutions reported third-quarter fiscal 2024 non-GAAP earnings of $1.21 per share, in line with the Zacks Consensus Estimate and declining 30.1% year over year.
Revenues of $905.5 million dropped 15.5% on a year-over-year basis and missed the consensus mark of $913 million.
Mobile revenues contributed nearly 61% to total revenues and declined 21% sequentially.
Broad markets contributed nearly 39% to total revenues and increased 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 160 basis points (bps) on a year-over-year basis to 46%. Gross margin expanded 100 bps sequentially, reflecting SWKS’ ongoing cost-reduction actions and favorable mix shift.
Research & development expenses, as a percentage of revenues, increased 390 bps year over year to 17.7%.
Selling, general and administrative expenses increased 70 bps to 7.9% in the reported quarter.
Non-GAAP operating margin contracted 630 bps on a year-over-year basis to 24.2% in the reported quarter.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash & cash equivalents and marketable securities were $1.28 billion compared with $1.2 billion as of Mar 29, 2024.
Long-term debt remained steady at $994 million as of Jun 28, 2024, unchanged sequentially.
Cash generated by operating activities was $273.5 million in the quarter under discussion compared with $300 million in the previous quarter.
Free cash flow was $249.1 million, with a 27.5% free cash flow margin.
Skyworks paid dividends worth $109 million in the reported quarter and repurchased 764,000 shares for a total of $77 million.
Guidance
For the fourth quarter of fiscal 2024, the company currently expects revenues between $1 billion and $1.04 billion. Earnings are expected to be $1.52 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 46% and 47%. Operating expenses are expected to be in the range of $197-$203 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Skyworks (SWKS) Down 6.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Skyworks Solutions (SWKS - Free Report) . Shares have lost about 6.1% 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 the most recent earnings report in order to get a better handle on the important drivers.
Skyworks' Q3 Earnings Meet Estimates, Revenues Down Y/Y
Skyworks Solutions reported third-quarter fiscal 2024 non-GAAP earnings of $1.21 per share, in line with the Zacks Consensus Estimate and declining 30.1% year over year.
Revenues of $905.5 million dropped 15.5% on a year-over-year basis and missed the consensus mark of $913 million.
Mobile revenues contributed nearly 61% to total revenues and declined 21% sequentially.
Broad markets contributed nearly 39% to total revenues and increased 1% sequentially.
Operating Details
Non-GAAP gross margin contracted 160 basis points (bps) on a year-over-year basis to 46%. Gross margin expanded 100 bps sequentially, reflecting SWKS’ ongoing cost-reduction actions and favorable mix shift.
Research & development expenses, as a percentage of revenues, increased 390 bps year over year to 17.7%.
Selling, general and administrative expenses increased 70 bps to 7.9% in the reported quarter.
Non-GAAP operating margin contracted 630 bps on a year-over-year basis to 24.2% in the reported quarter.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash & cash equivalents and marketable securities were $1.28 billion compared with $1.2 billion as of Mar 29, 2024.
Long-term debt remained steady at $994 million as of Jun 28, 2024, unchanged sequentially.
Cash generated by operating activities was $273.5 million in the quarter under discussion compared with $300 million in the previous quarter.
Free cash flow was $249.1 million, with a 27.5% free cash flow margin.
Skyworks paid dividends worth $109 million in the reported quarter and repurchased 764,000 shares for a total of $77 million.
Guidance
For the fourth quarter of fiscal 2024, the company currently expects revenues between $1 billion and $1.04 billion. Earnings are expected to be $1.52 per share at the mid-point of this revenue guidance.
The gross margin is expected to be between 46% and 47%. Operating expenses are expected to be in the range of $197-$203 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.