On July 30, 2024, Skyworks Solutions Inc (SWKS, Financial) released its 8-K filing for the third fiscal quarter of 2024, reporting revenue of $906 million, surpassing the analyst estimate of $900.40 million. However, the company posted a GAAP diluted earnings per share (EPS) of $0.75, falling short of the estimated $0.79.
Company Overview
Skyworks Solutions Inc (SWKS, Financial) produces semiconductors for wireless handsets and other devices that enable wireless connectivity. Its main products include power amplifiers, filters, switches, and integrated front-end modules that support wireless transmissions. Skyworks' customers are primarily large smartphone manufacturers, but the firm also has a growing presence in non-handset applications such as wireless routers, medical devices, and automobiles.
Performance and Challenges
Skyworks Solutions Inc (SWKS, Financial) reported solid revenue growth, driven by its mobile business ramping up and a recovering broad markets business. However, the company faced challenges in meeting EPS expectations, which could be attributed to higher operating expenses and restructuring charges.
Financial Achievements
Despite the EPS miss, Skyworks Solutions Inc (SWKS, Financial) achieved significant financial milestones. The company reported a year-to-date operating cash flow of $1.35 billion and free cash flow of $1.27 billion, representing a 43% operating cash flow margin and a 40% free cash flow margin. Additionally, the company increased its quarterly dividend by 3% to $0.70 per share.
Income Statement Highlights
| Metric | Q3 FY24 | Q3 FY23 |
|---|---|---|
| Net Revenue | $906 million | $1,071.2 million |
| Gross Profit | $364.1 million | $464.1 million |
| Operating Income | $130.4 million | $230.7 million |
| Net Income | $120.9 million | $195.8 million |
| GAAP Diluted EPS | $0.75 | $1.22 |
Balance Sheet and Cash Flow
Skyworks Solutions Inc (SWKS, Financial) reported total assets of $8.24 billion as of June 28, 2024, compared to $8.43 billion as of September 29, 2023. The company’s cash and cash equivalents increased to $1.26 billion from $718.8 million. Net cash provided by operating activities for the nine months ended June 28, 2024, was $1.35 billion, compared to $1.49 billion for the same period in 2023.
Key Metrics and Analysis
Key metrics such as the operating cash flow margin and free cash flow margin are crucial for evaluating the company's liquidity and cash-generating capabilities. Skyworks Solutions Inc (SWKS, Financial) maintained strong margins, with a 43% operating cash flow margin and a 40% free cash flow margin, indicating robust financial health.
“Skyworks generated solid results and strong profitability consistent with our guidance,” said Liam K. Griffin, chairman, chief executive officer, and president of Skyworks. “Exiting the June quarter, our mobile business is ramping up while our broad markets business continues to recover.”
Outlook
For the fourth fiscal quarter of 2024, Skyworks Solutions Inc (SWKS, Financial) expects revenue to be between $1.00 billion and $1.04 billion, with non-GAAP diluted earnings per share of $1.52 at the midpoint of the revenue range. The company anticipates a 20% sequential increase in its mobile business and modest improvement in broad markets.
Skyworks Solutions Inc (SWKS, Financial) continues to demonstrate resilience and adaptability in a competitive semiconductor industry. Investors will be keenly watching the company's ability to sustain revenue growth and improve profitability in the coming quarters.
Explore the complete 8-K earnings release (here) from Skyworks Solutions Inc for further details.
