26 January 2011

Skyworks grows revenue 7% to record $335.1m

For its fiscal first-quarter 2011, 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 record revenue of $335.1m, up 7% on $313.3m last quarter and up 37% on $245.1m a year ago (and just exceeding the $330–335m guidance).

On a non-GAAP basis, gross margin has risen from 42.2% a year ago and 43.8% last quarter to 44.7% (above the expected 44.5%), driven by an improving product mix, supply chain efficiencies, margin-enhancing demand-driven capital investments and continued manufacturing productivity enhancements.

Operating expenses have continued to rise, from $51.3m a year ago and $55.5m last quarter to $57m. Nevertheless, operating income has risen from $52.3m a year ago (an operating margin of 21.3% of sales) and $81.8m (26.1% margin) last quarter to $92.8m (27.7% margin), as Skyworks continues to make progress towards its mid-term operating model targeted at 30% with a minimum gross margin of 45%. Net income has risen from $47.7m a year ago and $78.8m last quarter to $84.7m.

During the quarter, Skyworks invested $33m in capital expenditure and back-end process investment (complementing the firm’s hybrid outsourcing model). It also recorded $13.6m of depreciation, retired its $50m credit facility (part of its broader strategy to reduce debt), and repurchased about 800,000 shares (at an average price of $23.15 per share). The balance sheet is hence now virtually debt free, yet Skyworks still increased its net cash by $41m and exited the quarter with more than $450m of cash and cash equivalents.

“These improvements highlight the progress we’ve made in our broader strategy to reduce debt and strengthen our balance sheet,” notes VP & chief financial officer Donald W. Palette. “Over the last three years we’ve improved our balance sheet from a negative $46m net debt position to a positive $426m net cash position,” he adds.

“We continued to benefit from strong underlying demand in the mobile Internet enhanced by ongoing share gains and by new product ramps,” says president & CEO David J. Aldrich.

During the quarter, Skyworks supported the rapidly emerging tablet market with wireless connectivity solutions compatible with all major mobile operating systems; ramped production of analog components supporting Cisco and Motorola’s fiber-to-the-home applications; secured design wins with Johnson Controls in support of their HomeLink automotive system being adopted by leading vehicle manufacturers worldwide; partnered with Ember to deliver ZigBee solutions for the energy management, home area network and industrial automation markets; launched analog control ICs for the Nintendo 3DS gaming system; unveiled silicon RF limiters for military radar receiver applications; captured multiple base-station transceiver sockets with global infrastructure providers supporting LTE, GSM and femtocell platforms; powered HTC’s next-generation smartphones with highly integrated front-end modules; and enabled the first commercial LTE handset on a 4G network to allow consumers anytime, anywhere connectivity at data rates up to 100Mbps.

“Skyworks is enabling wireless broadband connectivity across multiple high-growth platforms including smartphones, tablets, smart grids and home automation systems, as well as within the supporting network infrastructure,” says Aldrich. “At a higher level, our goal remains to diversify across new vertical markets, develop differentiated products and deliver operational excellence, positioning us to outperform our addressed markets,” he adds.

“Consumer appetite for anytime anywhere connectivity continues to grow exponentially,” continues Aldrich. “In fact, 2010 holiday sales underscore the strong demand for Internet-connected mobile devices that provide ‘always on’ access to social networking sites, gaming, video, music and web access. Retailers have highlighted mobile devices as a bright spot in consumer spending this past holiday season, and we certainly benefited from this demand,” he adds. “Adoption of smartphones is happening at an accelerated pace with a growth rate of at least four times that of the traditional cellular handset market,” Aldrich notes. “Skyworks is in a unique position to capitalize on these healthy market dynamics based on our unique product offering and our broad customer base. Our products support all smartphone and tablet operating systems including Android, Symbian, Windows Mobile and others.”

Based on overall business momentum and the ramp of new applications, for its fiscal second-quarter 2011 (to end March) Skyworks expects revenue of $310–320m (up 30–34% year-on-year — much better than normal seasonality), gross margin of 43.8% and operating expenses of $57.5–58m.

See related items:

Skyworks’ revenue exceeds revised guidance; up 14% to record $313.3m

Skyworks grows revenue 44% year-on-year to $275.4m

Skyworks' March quarter beats guidance with 38% year-on-year growth

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

Tags: Skyworks

Visit: www.skyworksinc.com