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9 November 2012

Skyworks fiscal Q4 exceeds forecast, with even better 2013 predicted

Skyworks Solutions Inc of Woburn, MA, USA, which manufactures high-reliability analog and mixed-signal semiconductors, has reported its fiscal fourth-quarter and full-year results for the period ending 28 September 2012. Revenue for the quarter was $421.1m, up 8.2% on $389m last quarter (and slightly exceeding its own revised guidance of $420m, given at its analyst day in September).
On a non-GAAP basis, operating income for fiscal Q4/2012 was $103.6m, up from $91.7m in Q3, reflecting a 13% increase. Non-GAAP diluted earnings per share for Q4 was $0.53 compared to $0.45 for the prior quarter, representing an 18% sequential improvement. For fiscal full-year 2012, revenue was $1.57bn, up 11% on 2011’s $1.42bn. Non-GAAP diluted earnings per share for fiscal 2012 was $1.90.

Fiscal Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012
Revenue $402.3m $393.7m $364.7m $389m $421.1m

“Skyworks is capitalizing on global mobile connectivity ubiquity and demand for high-performance analog solutions across a diverse set of vertical markets,” says president & CEO David J. Aldrich. “Interrelated macro trends such as social networking, cloud-based content and the explosion of audio and video streaming are driving increased semiconductor content and complexity in smart-phones, tablets, ultrabooks and e-readers as well as within the supporting network infrastructure.

“At the same time, wireless and power management functionality is rapidly proliferating across adjacent applications spanning machine-to-machine, automotive, broadband, home automation, smart grid and medical markets,” he adds. “Given our differentiated product portfolio, engagements with all key OEMs and scale, Skyworks is well positioned to continue to gain market share, capture additional content per platform and, as a result, significantly outperform our targeted markets throughout fiscal 2013.”

Aldrich added that Skyworks’ Q4 business highlights included: launching a suite of custom ZigBee sensors supporting home monitoring and security systems; supporting NetGear’s 802.11ac deployments with nearly 20 analog devices per router; ramping silicon-on-insulator antenna switch modules (ASMs) as part of LTE smart-phones and tablets; capturing RF sockets at Alcatel-Lucent, Cisco, Ericsson, Huawei, Siemens Nokia and ZTE for 3G/4G base-stations; shipping more than 7 million camera flash drivers; and receiving ‘Best Vendor’ and ‘Outstanding Delivery’ awards from ZTE.

Considering the Skyworks’ Q1/2013 outlook, VP & chief financial officer Donald Palette commented, “Our visibility is strongly driven by new platform ramps, design-win momentum and the depth of our product pipeline. For the first quarter of 2013, we anticipate revenue to be up 14% year-over-year and up 7% sequentially to the $450m range, with further improvement in non-GAAP operating margin to above 25% and, in turn, non-GAAP diluted earnings per share of $0.54.”

Reasons to be cheerful

During the press conference following the company’s statements on its financial performance, Aldrich gave a detailed explanation of what he regards as Skyworks’ strong current position, market strategy and the reasons why he is expecting significantly improved performance in 2013.

“I'd like to highlight four key elements of our strategy that underpin our growth and expectations: we are connected to high-growth markets; we are broadly diversified across customers, products and markets; our competitive differentiation provides a sustainable advantage; and our business model enables us to efficiently convert strong top line growth into superior operating results.”

The booming mobile broadband market provides Skyworks with one of “the highest growth markets within [our] technology space today”, Aldrich added. “The mobile broadband phenomenon continues to advance on a global basis, slowly displacing traditional computing. Internet stalwarts like Google, Amazon and Microsoft, who historically have not participated in mobile devices, today see mobility as a critical component of their long-term strategies. This has spurred a race to provide the next generation of leading-edge smart-phones and tablets as a gateway for e-commerce, for on-demand content, location-based advertising, mobile apps, cloud-based services and social networks.”

Next he considered the advantages of Skyworks’ diversification strategy: “There are three elements to this: diversification across our OEM customers, within our product offering and across a broad array of end markets. The result is that today we are the supplier of choice with a leading share position at every mobile device OEM and baseband partner, helping to insulate us somewhat from customer share shifts.”

Looking at the Skyworks product portfolio, Aldrich considered its variety to be another position of strength: “We're experts in RF and analog system design, leveraging a global force of system and applications engineers. We offer an unmatched technology portfolio that includes deep expertise in SOI, CMOS, GaAs, BiFET and silicon germanium, along with a library of nearly 1000 patents.”

And finally, the “explosion in mobile connectivity” constituted another reason for the company’s optimism. “Over the course of 2013, we expect to see a wave of 802.11ac-enabled notebooks, tablets and smart-phones enter the market with higher addressable dollar content for Skyworks. We already have significant traction in the 802.11ac market and have been designed into some of the first ultrabooks and smart-phones to incorporate this technology.”

See related items:

Skyworks’ revenue and profit rebound more than expected from last quarter

Skyworks’ revenue falls 29% quarter-to-quarter, but up 12% on a year ago

Skyworks’ 17% year-on-year revenue growth beats guidance

Skyworks grows quarterly revenue more-than-expected 13% to $402.3m

Tags: Skyworks


Author: Matthew Peach, Contributing Editor

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