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Skyworks (SWKS) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

Skyworks Solutions, Inc. SWKS is slated to report first-quarter fiscal 2020 results on Jan 23.

For first-quarter fiscal 2020, Skyworks expects revenues in the range of $870 million to $890 million.

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $880.29 million, indicating a decline of 9.4% from the year-ago reported figure.

Non-GAAP earnings are anticipated to be $1.65 per share at the mid-point. The Zacks Consensus Estimate for earnings has been steady for the past 60 days at $1.65, suggesting a decline of 9.8% from the prior-year reported figure.

Notably, the company surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while missing once, the average beat being 1.09%.

In the fourth-quarter fiscal 2019, Skyworks had reported non-GAAP earnings of $1.52 per share, beating the Zacks Consensus Estimate by 1.33%. Revenues of $827 million surpassed the Zacks Consensus Estimate of $825 million.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Momentum in Skyworks’ Wi-Fi 6 portfolio comprising front-end modules with low-noise amplifiers and high power WLAN power amplifiers is likely to have driven first-quarter fiscal 2020 performance.

For instance, Skyworks Wi-Fi 6 solutions are enabling notable companies to offer mesh network and connected home devices. The solutions have facilitated Asus, Arris, Netgear, Ruckus, D-Link, and TP-Link to launch new products and reduce time-to-market.

Growing influence of the company’s cognitive wireless devices and analog SoCs (system-on-chip) and LTE offerings is also expected to have led to incremental revenues in the fiscal first quarter. With Sky5 unifying platform, Skyworks is also enabling notable infrastructure customers to enhance 5G small cell architecture.

Moreover, the company’s fully integrated LTE offerings have been implemented by major automotive manufacturers.

In fact, Skyworks’ LTE-based IoT engines have been deployed by Sierra Wireless across transportation platforms and industrial gateways.
 

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote

Further, solid adoption of Skyworks’ expanding product portfolio in the IoT solutions and 5G markets are likely to show on the fiscal first-quarter results. Markedly, the company’s offerings have been implemented by Sonos for indoor/outdoor portable smart speakers.

Additionally, traction witnessed by the company’s latest suite of Sky5 offerings is likely to have positively impacted the fiscal first-quarter performance.

Notably, Skyworks’ Sky5 offerings have been implemented by Samsung, to power its first foldable 5G premium smartphone, and other 4G mobile devices. Moreover, LG is leveraging Sky5 solutions for its flagship 5G smartphone with dual screens and an OLED display, V50ThinQ.

Furthermore, SkyOne and SkyLiTE have been finding application in Oppo, Xiaomi and Vivo flagship smartphones.

Nonetheless, growing expenses on product development amid stiff competition from fellow peers including Qorvo and Broadcom in the radio frequency semiconductor market is likely to have limited margin expansion in the fiscal first quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Skyworks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Skyworks has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks which you may consider as our proven model shows that these have the right mix of elements to beat estimates this time around:

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +10.80% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple AAPL has an Earnings ESP of +4.08% and a Zacks Rank of 2.

Trimble Inc. TRMB has an Earnings ESP of +1.59% and a Zacks Rank of 2.

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