News

22 January 2010

 

Skyworks reports revenue up 17% year-on-year to record $245m

For its fiscal first-quarter 2010, Skyworks Solutions Inc of Woburn, MA, USA, which manufactures linear products, power amplifiers, front-end modules and radio solutions for handset and infrastructure equipment, has reported revenue of $245.1m (exceeding guidance of $238–242m). This is up 7% on last quarter’s $228.1m (continuing the recovery from the March quarter’s low of $173m) and up 17% on $210.2m a year ago (after last quarter was still down slightly year-on-year).

“Skyworks’ strong performance is being driven by several key trends including the exploding demand for mobile Internet applications, increasingly diversified linear products and the rapid adoption of smart grid technologies,” says president & CEO David J. Aldrich.

On a non-GAAP basis, gross margin has risen from 40.3% a year ago and 40.9% to 42.2%, driven by a richly diversified product mix, volume ramp of margin-accretive new products, continued factory process and productivity enhancements, product and end-yield improvements, and double-digit year-on-year material cost reductions.

Net income has risen from $27.6m a year ago and $41.8m last quarter to $47.7m. During the quarter, cash flow from operations was $53m. So, despite $11m of depreciation, $15m in capital expenditure and retiring $5m of convertible debt, cash and equivalents rose from $370m to $402m.

“As our improving gross and operating margins demonstrate, our innovative solutions are allowing us to further differentiate Skyworks, positioning us to create even greater competitive advantages,” says Aldrich. Strong top- and bottom-line growth both sequentially and year-on-year demonstrate Skyworks’ ongoing transformation to a high-margin and a highly diversified analog company, he adds.

During the quarter, Skyworks supported the launch of Google’s Nexus One Android-based smart phone; launched what is claimed to be the industry’s broadest-frequency-range voltage control oscillator (VCO) for 3G and 4G base-station infrastructure; ramped up analog control devices for Intel's wireless local-area networking (WLAN) applications; introduced a family of highly integrated CMOS switches with high isolation capability for the direct broadcast satellite TV market; started volume production of custom solutions supporting Itron’s OpenWay energy management module; and extended ISO/TS 16949 automotive certification to its manufacturing plant in Mexicali, Mexico, allowing further penetration into new markets.

Based on broad-based business strength and new applications, for fiscal second-quarter 2010 (to end March) Skyworks expects revenue of $225m, down 8% but significantly better than the seasonally normal 10–15% (and up 30% year-on-year). This is attributed to a high mix of less seasonal linear products business, as well as the continuous rise in smart grid business. Non-GAAP gross margin should drop slightly to 41–41.5% (due to the lower sales volume).

“Given our top line growth plans, scale, product gross margin improvements, and operating expense leverage, we now have a path to operating margins in the mid-20% on revenues of $280–300m," says Donald W. Palette, VP & chief financial officer. Margins should start tracking towards 45%, driven by volume. “We’ve got the new products, higher dollar content, some of these new linear product markets that we’re serving, and the 6-inch ramp [with full conversion from 4-inch wafers due to complete at the end of this quarter].” Skyworks is also continually focusing on design for cost and operational efficiencies in the factories, Palette adds. “All those things are going to contribute to expanding the margins.”

See related items:

Skyworks’ recovery strengthens, boosted by diversification, market-share gains and content growth

Skyworks’ revenue rebounds by 11% from March-quarter dip

Skyworks surpasses RFMD in power amplifier market share

Skyworks’ revenue shrinks 18%, but beats guidance

Skyworks generates $75m in cash flow despite 10% sales drop

Search: Skyworks

Visit: www.skyworksinc.com