8 November 2013

Skyworks' quarterly revenue grows more-than-expected 9.4% to $477m

For its fiscal fourth-quarter 2013 (to 27 September), Skyworks Solutions Inc of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported revenue of $477m, up 9.4% on $436.1m last quarter and 13.3% on $421.1m a year ago (and slightly above the forecast of $475m). Revenue was split 40% for high-performance analog (HPA) and 60% for handsets. For fiscal full-year 2013, revenue was a record $1792m, up 14% on fiscal 2012’s $1568.6m.

“Skyworks continues to outperform as we expand our diversified market footprint, gain content with customized analog solutions and capitalize on global demand for the Internet of Things,” says president & CEO David J. Aldrich.

Gross margin has risen from 42.9% a year ago and 44% last quarter to 44.4% (ahead of the midpoint of the 44-44.5% guidance range).

Operating expenses were $81.5m. On a non-GAAP basis, operating income has risen from $103.6m (operating margin of 24.6% of revenue) a year ago and $111.9m (operating margin of 25.7%) last quarter to $130.3m (operating margin of 27.3%).

Net income has risen from $103.5m ($0.53 of diluted earnings per share) a year ago and $103.8m ($0.54 per share) last quarter to $121.2m ($0.64 per share, $0.02 better than guidance). For full-year 2013, net income was $423.5m ($2.20 per share), up from fiscal 2012’s $365.6m ($1.90 per share).

For fiscal Q4, cash flow generated from operations was $166m (up from $65m last quarter), contributing to full-year fiscal 2013 operating cash flow of $508m and free cash flow of $384m. Quarterly capital expenditure was $38m and depreciation was $19m. During the quarter, cash reserves hence rose from $400m to $511m. Skyworks also repurchased over 8 million shares of common stock at an average price of $22.75 per share (totalling $173m).

“Our ongoing diversification coupled with analog content gains in connectivity are enabling us to deliver better-than-seasonal revenue and year-over-year EPS growth of 20%,” notes VP & chief financial officer Donald W. Palette.

During the quarter, Skyworks: enabled WNC’s remote lighting, in-home monitoring and security/automation platforms with power management and ZigBee front-end devices; launched highly efficient isolators at Ericsson for LTE wireless base-stations; partnered with Silicon Labs to develop low-power, smart energy solutions supporting communication hubs, meters and in-home displays; and captured analog control IC sockets for Johnson Controls’ Homelink system. The firm also developed low-noise amplifiers targeting Shure’s broadcast microphones; delivered optical solutions for Varian Medical radiation oncology applications; began volume shipments of DC/DC converters and LED backlight drivers for automotive displays at LG; supported global satellite navigation standards with high-linearity modules; and won hi-reliability designs at Cobham, EADS and Teledyne for aerospace and defense applications

“Based on our product innovation, proprietary solutions and track record of operational execution, we’ve created a differentiated business model,” says Aldrich. “As a result, we are well positioned for sustainable above-market growth.”

For fiscal first-quarter 2014, Skyworks expects revenue to grow by 4.8% to $500m (the firm’s first quarter at a $2bn annualized revenue run rate). Gross margin should rise slightly to 44.5%. Operating expenses are expected to grow slightly to $82.5m, yet operating margin should still rise to 28% (up from 25.3% a year ago). Diluted earnings per share are forecast to grow to $0.66.

“Over the course of fiscal 2014, we expect continued margin enhancement, driven by growth of our diversified analog business and by capturing new customized content across the world’s leading connectivity platforms,” says Palette. “Many of the drivers for a strong 2014 are in place today, giving us a high level of confidence in our growth trajectory over the course of the year and putting us on a clear path to achieving our mid-term business model of 30% operating margins at a quarterly revenue level of $550m,” he adds. “This would produce around $3 in annualized earnings per share [compared with $2.20 for fiscal 2013].”

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Tags: Skyworks

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