Skyworks Pops 15% After-Hours As 1Q Sales Beat Analysts’ Estimates

Shares of Skyworks Solutions gained by around 15% in Thursday’s extended market trading session after the semiconductor company posted record revenues in 1Q21.

The company’s revenue in 1Q jumped 69% to $1.5 billion year-on-year, beating analysts’ estimates of $1.06 billion. Skyworks (SWKS) recorded earnings of $3.36 per share that came in ahead of analysts’ expectations of $2.08 per share.

Skyworks CEO Liam K. Griffin said, “Skyworks delivered all-time record quarterly results, leveraging our expansive technology reach. Demand for our proven solutions continues to accelerate across a growing set of customers and end markets, powering the world’s most impactful use cases, from 5G mobile platforms to IoT, wireless infrastructure, autonomous transport and machine-to-machine installations.”

“Importantly, the multi-year wireless transition is now underway, creating a burgeoning set of new opportunities. With deep customer engagements, underpinned by decades of technology investments and scale, Skyworks is uniquely positioned to lead,” Griffin added.

Separately, the company also announced a share repurchase program worth $2 billion. Skyworks expects to fund the share repurchase through its working capital and as of Jan. 1, it had cash and marketable securities of $1 billion. The company will repurchase shares from time to time through Jan. 26, 2023. (See Skyworks Solutions stock analysis on TipRanks)

In the second quarter, Skyworks expects revenues to be between $1.1 billion and $1.2 billion. The company projects to post non-GAAP diluted earnings of $2.34 per share in 2Q.

Following the earnings results, Oppenheimer analyst Rick Schafer assigned a Hold rating on the stock.

“We attribute surprising upside to robust iPhone12 demand, where we estimate SWKS content up ~30%. Apple was a 70% customer in F1Q (from 60%). SWKS also accelerated Sky5 platform sales to Samsung and China ‘VOX’ OEMs [original equipment manufacturer],” Schafer wrote in a note to investors.

“We believe mgmt leveraged SWKS internal TC-SAW/BAW [surface acoustic wave and bulk acoustic wave] capacity to meet upside as demand signals strengthened into December. RF [Radio frequency] content/ complexity increases 5G/4G led by filters. We forecast 5G RF content CAGR of 10% over the next several years and see SWKS positioned to benefit.” the analyst added.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 13 analysts recommending a Buy and 7 analysts suggesting a Hold. The average analyst price target of $176.18 implies 10.3% upside potential to current levels.

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