By Senad Karaahmetovic
Shares of Skyworks Solutions (NASDAQ:SWKS) are up over 4% in pre-market Tuesday after the company delivered solid results for its first fiscal quarter.
Skyworks posted an in-line Q1 EPS of $2.59 on revenue of $1.33 billion (-12% year-over-year), just ahead of the consensus of $1.32B. For this quarter, SWKS guided for revenues in the range of $1.13-1.18B, missing the $1.19B consensus. The adjusted EPS is seen at $2.02, again below the $2.23 average analyst estimate.
The board approved a new $2B stock repurchase program.
While Skyworks missed analyst estimates, sell-side brokers mostly agree that the overall results were better than feared and feel encouraged by signs of the Android smartphone market bottoming.
“We maintain our Neutral rating on SWKS primarily due to cyclical concerns related to its largest customer and consumer Wi-Fi business,” Goldman Sachs analysts said in a client note.
Morgan Stanley analysts hiked the price target to $18 to $114 per share, reflecting “solid” numbers.
“We like Skyworks' long-term position, and do see ongoing content gains with Apple, but we expect visibility to remain somewhat limited in the next few quarters, given the chaos in the supply chain,” they said in a note sent to clients.
“We think the most important variable in the next couple of months will be demand in China as we move past recent lockdowns; we do like Skyworks position vs. peers, given the outsized Apple exposure, because Apple is taking more than its share of the Chinese market, but visibility should remain fairly low. But the fact that nobody else is ordering at run rate leaves us with outsized concentration. Those factors keep us EW.”