26 July 2011

Skyworks quarterly revenue up 27% year-on-year to $356.1m, beating guidance

For its fiscal third-quarter 2011 Skyworks Solutions Inc of Woburn, MA, USA, which makes linear products, power amplifiers, front-end modules and radio solutions for handset and infrastructure equipment, has reported revenue of $356.1m (with linear high-performance analog representing just over 25% of revenue, and handsets just under 75%).

However, excluding a contribution of $6.5m from the acquisition of fabless RF front-end IC supplier SiGe Semiconductor (which closed on 10 June), revenue would have been $349.5m. This is still up on guidance of $345m, and up 27% organically on $275.4m a year ago and up 6% on $325.4m last quarter, despite what is described as a “challenging quarter for some of our market and OEM customers” by president & CEO David Aldrich.

“Our momentum is being driven by content growth and share gains within leading smart phones, tablets, gaming platforms, home automation systems and network infrastructure, coupled with diversification into new vertical markets,” says Aldrich. “Further, the advent of LTE, machine-to-machine and cloud computing applications is translating into stronger design-win activity as more and more electronic platforms are becoming wirelessly enabled to share data, voice and video,” he adds.

On a non-GAAP basis, gross margin has risen further, from 43.3% a year ago  and 43.9% last quarter to 44.9%. Operating expenses have risen from $55.6m a year ago and $57.9m last quarter to $62.5m, mainly due to an increase in R&D spending.

Despite this, strong operating leverage has led to operating income rising from $63.5m a year ago (23.1% operating margin) and $84.9m last quarter (26.1% margin) to $97.6m (27.4% operating margin). Net income was $93m, up on $78.7m last quarter and $58.7m a year ago.

During the quarter, Skyworks generated $86m in cash flow from operations. Capital expenditure was $20m, down from $32m last quarter as the firm has begun to moderate back towards steady-state levels after completing most capacity investments in its facilities in Mexicali and Newbury Park. After accounting for about $210m for the SiGe acquisition and $19m as part of an ongoing stock repurchase program, as well as $15m in depreciation, the firm’s cash balance fell from $504m to about $310m during the quarter.

“Skyworks exceeded all key metrics last quarter, and we see a steep growth trajectory heading into the second half of calendar 2011,” says Aldrich. “Given our differentiated product portfolio, extensive customer engagements, technology roadmaps and scale, Skyworks is uniquely positioned to capitalize on this rapidly approaching connectivity revolution and, in turn, to sustainably outpace industry growth,” he reckons. 

During fiscal third-quarter 2011, Skyworks enabled wireless connectivity at all three market-leading gaming console OEMs; ramped high-power filters for military and homeland security markets; captured wireless networking design wins in support of home monitoring and security deployments; was awarded a major electronic toll collection system contract with a portfolio of analog control ICs; secured high-power, transmit/receive switches, high-frequency modulators and wide-band digital attenuator sockets in support of the TD-LTE China market; launched ultra-low-power low-noide amplifiers (LNAs) for diverse markets including set-top boxes, Bluetooth headsets, hearing aids, meter readers and 2.4GHz wireless networks; unveiled the first stand-alone, high-dynamic-range power detectors for 3G and LTE smart-phones and datacards.

For its fiscal fourth-quarter 2011 (to end-September), Skyworks expects record revenue of $400m (including $20–25m from SiGe, but up organically 7% quarter to quarter).

“We expect to continue to grow in December, both in an organic and a consolidated basis,” says Aldrich. “This highlights the real power of our diversification strategy,” he adds. During the quarter (in late May), Skyworks also announced a definitive agreement to acquire power management firm Advanced Analogic Technologies Inc (AnalogicTech) of Santa Clara, CA, an analog semiconductor firm focused on enabling energy-efficient devices for the application-specific power management needs of feature-rich consumer electronic devices as well as devices in a range of computing, industrial, medical and communications applications.

“Based on strong bookings and order visibility, the stage is set for Skyworks to again outperform our addressable markets throughout the back half of 2011 and into 2012,” confirms Donald W. Palette, VP & chief financial officer. “We are well positioned to expand margins and deliver operating leverage.” 

See related items:

Skyworks’ revenue exceeds guidance, up 37% year-on-year

Skyworks grows revenue 7% to record $335.1m

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

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

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