Skyworks Solutions Inc SWKS reported strong second-quarter fiscal 2015 results, driven by superior execution of operational plans and healthy demand pull. GAAP net income for the reported quarter more than doubled to $166.5 million or 85 cents per share from $76.9 million or 40 cents per share in the year-earlier quarter. The healthy year-over-year increase in earnings was primarily driven by higher revenues.
Excluding non-recurring items, non-GAAP earnings for the reported quarter came in at $1.15 per share versus 62 cents in the year-ago quarter, 3 cents ahead from the prior guidance. The recurring earnings (with stock-based compensation adjustments) of $1.01 per share missed the Zacks Consensus Estimate by 2 cents.
Quarter Details
Skyworks reported revenues of $762.1 million in the reported quarter, up 58% from the year-ago quarter and ahead of the prior guidance of $750 million. The reported revenues were also well ahead of the Zacks Consensus Estimate of $751 million. Skyworks continues to capitalize on the global mobile connectivity and demand for high-performance solutions across a diverse set of vertical markets and Internet of Things.
Gross profit in the reported quarter was $352.2.0 million compared with $212.4 million in the year-ago quarter. Operating income increased over twofold to $219.9 million from $102.6 million in the prior year.
The company ended the quarter with cash and cash equivalents of $1,054.2 million and zero debt balance. Skyworks generated $155 million cash from operations during the quarter. Skyworks distributed $73 million to shareholders through dividend and stock repurchases and declared a cash dividend of 13 cents per share payable on Jun 4, 2015.
Moving to product mix, Power amplifiers represented 31% of revenue. Integrated mobile systems represented 47% and broad markets were 22% in the reported quarter.
Outlook
Moving forward, Skyworks is well positioned to capitalize on the Internet of Things with a healthy demand for high-performance wireless solutions in new markets. The company continues with its strategy of providing leadership and custom integrated solutions and at the same time diversifying its business into high-margin verticals. Leveraging on product innovation and broad-based customer demand, the company appears poised for sustainable above-market growth in the near term. We remain impressed with the robust quarterly results of the company.
The company expects third-quarter fiscal 2015 revenues to be in the range of $800 million with gross margin of 48%. Non-GAAP earnings are expected to be in the range of $1.28 per share.
Skyworks currently has a Zacks Rank #2 (Buy). Stocks that look promising in the sector and are worth a look now include NeoPhotonics Corporation. NPTN and Broadcom Corp BRCM, both carrying a Zacks Rank #1 (Strong Buy) and Cypress Semiconductor Corporation CY, carrying a Zacks Rank #2 ( Buy).
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