SWKS Skyworks Solutions Inc

Skyworks Solutions, Inc. (SWKS) reported revenues of $356.1 million, which surpassed management’s guidance of $345 million. The reported figure includes $6.5 million of revenue from the acquisition of SiGe semiconductor (which closed on June 10, 2011).

Excluding the SiGe contribution, revenue would've been $350 million, up 27% year-over-year organically.

Skyworks posted a net income of $51.5 million or $0.27 per diluted share compared to a net income of $34.7 million or $0.19 per diluted share in the year-ago quarter. Excluding acquisition-related charges but including stock-based compensation expense, Skyworks reported a net income of $0.41 per share, beating the Zacks Consensus Estimate by a penny.

Margins

Gross margin (excluding stock-based compensation expenses) improved to 44.9% from 43.3% in the year-ago quarter. Operating margin came in at 27.4% compared to 23.1% in the year-ago quarter. During the quarter, Skyworks generated $86 million of cash from operations and used $20 million in capital expenditures.

Skyworks repurchased approximately 700,000 shares at an average price of $31.86 per share. Skyworks exited the fourth quarter with cash and cash equivalents of $310.357 million, down from $503.8 million at the end of the previous quarter.

Guidance

Going forward, Skyworks projects revenues of $400 million, with a $20 million – $25 million from the SiGe acquisition. Gross margin is expected around 44.6% – 45.0%.  Excluding stock-based compensation expenses and restructuring charges, EPS is expected at $0.53.

Skyworks continues to benefit from strong underlying demand in the mobile Internet market driven by market share gains and new product ramps. Broadband mobile subscriptions continue to grow in leaps and bounds.

The advent of cloud computing is expected to take the trend further with the ever-growing need for wireless connectivity. The products from Skyworks support all smartphone and tablet operating systems, including Android, Symbian, Windows Mobile and others.  

Skyworks continues to gain traction on the network infrastructure side of the mobile Internet connection as operators install new base stations, new routers, and back-haul equipment to expand coverage of data services and prepare for next generation LTE deployments.

As carriers like Verizon (VZ) and AT&T (T) accelerate their LTE plans, Skyworks expects a solid opportunity for growth in the coming years with its broad product portfolio.

 
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