Skyworks’ quarterly revenue falls 11% year-on-year to $810m

For fiscal second-quarter 2019 (ended 29 March), Skyworks Solutions of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported revenue of $810.4m, down 16.6% on $972m last quarter and 11.3% on $913.4m a year ago.

By market sector, Mobile (Integrated Mobile Systems and Power Amplifiers) fell from 73% of total revenue last quarter to 67%, while Broad Markets rose from 27% to 33%.

Continued strengthen in our high-growth Broad Market business [with both sequential and year-over-year growth] allowed us to partially offset unit declines in Mobile, particularly across China end-markets,” says senior VP & chief financial officer Kris Sennesael.

Skyworks delivered another quarter of solid financial performance leveraging the strength of our business model and momentum across our high-growth Broad Markets and IoT [Internet of Things] portfolio,” says president & CEO Liam K. Griffin.

On a non-GAAP basis, gross margin was 50.7%, down from 51% last quarter but level with a year ago.

Operating expenses (OpEx) have been cut by 3% from $139m last quarter to $135m.

Net income was $256.6m ($1.47 per diluted share), down from $324.6m ($1.83 per diluted share) last quarter and $302.4m ($1.64 per diluted share) a year ago.

Cash flow from operations was $192.1m. Capital expenditure (CapEx) was $96.7m. During the quarter, Skyworks distributed $66m in dividends and repurchased 1.7 million shares of common stock for $141.5m. Overall, cash, cash equivalents and marketable securities hence fell from $1102m to $991m. The firm has no debt.

Since the end of the quarter, Skyworks’ board of directors has declared a cash dividend of $0.38 per share of the company’s common stock, payable on 11 June to stockholders of record at the close of business on 21 May.

During the quarter, our design-win execution accelerated, building a growing pipeline of new opportunities while positioning us for continued traction across a diverse set of end markets, applications and customers,” says Griffin.

For example, in the quarter we led the transition to the latest WiFi-6 standard with platform wins at Aruba, Asus, Cisco and Netgear. We gained content with our SkyOne platform and DRx engines in Samsung’s flagship Galaxy S10 smartphones. We leveraged our portfolio of audio SOCs supporting new high-fidelity stereo headsets, Samsung’s premium sound bars, and gaming applications. We enabled long-range machine-to-machine (M2M) communication in smart meters and street lighting, and we captured sockets in the first commercially available 5G indoor access point. We also secured massive MIMO infrastructure wins with Ericsson and Nokia as they roll out 5G. We expanded our automotive footprint with LTE devices supporting eCall, remote entry, in-cabin entertainment and additional features. We extended our reach across new categories in both aerospace and defense, leveraging our new C-band filtering solutions,” Griffin adds.

Driven by such strategic wins and content gains in mobile, as well as traction across diverse customers, markets and applications, Skyworks expects revenue to rebound to $815-835m in fiscal third-quarter 2019 (to end- June). Gross margin should be 50.5-51%. Operating expenses are expected to rise slightly to $137m. Diluted earnings per share should grow to $1.50.

Looking ahead, we are well positioned to outperform with seasonal product ramps and 5G gaining further traction,” says Sennesael. “Broad Markets business continues to outperform and is on path for double-digit growth again in fiscal 2019,” adds Griffin.

Our advanced connectivity solutions are enabling the critical wireless protocols that form the backbone of mobile economy,” says Griffin. “From data center to cloud, media and entertainment, to e-commerce and ride-hailing services, our innovative technology is underpinning the newest generation of connected applications. As we transition to 5G, these connections become increasingly more important,” he adds. “Through our unique systems expertise, strategic partnerships and global scale, Skyworks is well positioned to address the technical challenges and complexity of 5G, capitalizing on a new era of unprecedented opportunity.”