Skyworks’ (SWKS) Hit Q3 Revenue, Income Up Y / Y – Jul 30, 2021

Skyworks solutions (SWKS Quick QuoteSWKS Free Report) reported non-GAAP earnings of $ 2.15 per share for the third quarter of fiscal 2021, beating Zacks Consensus estimate by 0.9% and up 72% year over year.

Sales of $ 1.12 billion exceeded Zacks’ consensus estimate by 1.4% and rose 51.5% year over year.

The company’s quarterly results benefited from the increased 5G deployment rate. Mobile revenue rose 52% year-on-year. Revenue in broad markets grew 50% year over year, driven by strong demand for IoT solutions, including Wi-Fi 6 and 6E and smart audio, as well as new use cases in industrial and automotive markets.

Expansion of the user and partner base

Skyworks’ Sky5 adoption remains strong as the platform anticipates upcoming smartphone launches from. drives alphabet‘s (GoogL Quick QuoteGoogL Free report) Google as well as Oppo, Vivo and Xiaomi.

Facebook (FB Quick QuoteFB Free Report) uses Skyworks Wi-Fi front-end modules for its next-generation portal devices. The company has ramped up the Wi-Fi 6 and 6E platforms in Altice, Charter communications (CHTR quick offerCHTR Free report) and Aruba Networks.

Skyworks has partnered with Linksys to bring the first Wi-Fi 6E mesh network system to the market. The company rolled out connected home and security solutions at Honeywell during the quarter.

The company supplied cognitive audio platforms to Samsung and Vizio for their home theater systems. The Skyworks platform was selected by Peloton for its home fitness applications.

Operational details

Non-GAAP gross margin increased 50 basis points (bps) year over year to 50.6%.

Research and development costs decreased by 420 basis points (bps) to 11.7% compared to the previous year.

Selling, general and administrative expenses increased 20 basis points to 7.6% in the quarter.

The non-GAAP operating margin increased 490 basis points year over year to 36.1% for the quarter.

Balance sheet & cash flow

Cash and marketable securities were $ 2.98 billion on July 2, 2021, compared to $ 1.42 billion on April 2, 2021.

Long-term debt as of July 2, 2021 was $ 1.49 billion.

Cash flow from operating activities was $ 272.9 million compared to $ 615.7 million for the previous quarter.

Skyworks’ board of directors increased the dividend 12% to 56 cents per share, which is payable to shareholders on September 7, 2021 beginning August 17.

During the quarter, the company completed the acquisition of Silicon Labs’ infrastructure and automotive businesses.

Orientation aid

For the fourth quarter of fiscal 2021, Skyworks expects revenues between $ 1.270 billion and $ 1.330 billion, a growth of 36% over the prior-year quarter. Earnings are expected to be $ 2.53 per share, up 37% from the figure reported in the prior year quarter.

This Zacks Rank # 2 (Buy) company expects a gross margin in the range of 51% to 51.5%. Operating costs are expected to be between $ 180 million and $ 183 million. You can view the full list of Zacks’ current # 1 ranked (Strong Buy) stocks here.

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