Will Apple Inc. (NASDAQ:AAPL) Weakness Hurt Skyworks Solutions Inc (NASDAQ:SKWS) Earnings?

Apple, AAPL, Skyworks, SKWS
Photo Credit: Omar Jordan Fawahl

Skyworks Solutions (SWKS) Information Technology – Semiconductors | Reports July 21, After Market Closes

Key Takeaways

  • The Estimize consensus is looking for earnings per share of $1.22 on $752.36 million in revenue, 1 cent higher than Wall Street on the bottom line and $2 million on the top
  • Skyworks heavy reliance on waning iPhone sales are expected to take a toll on earnings
  • In an effort to reduce dependence on the smartphone market, Skyworks has built out a number of new businesses including the burgeoning Internet of Things
  • What are you expecting for SWKS? Get your estimate in here!

A tough macroeconomic environment and lower demand for chips has caused a broad decline in the semiconductor industry. It hasn’t helped that many of these companies provide key parts to Apple’s iPhone which can not seem to find its footing. Skyworks Solutions has unfortunately been on the wrong end of both. As the company heads into its fiscal third quarter expect to see negative growth for the first time in over 2 years.

The Estimize consensus is looking for earnings per share of $1.22 on $752.36 million in revenue, 1 cent higher than Wall Street on the bottom line and $2 million on the top. Compared to year earlier this reflects a 9% decline in earnings and 7% in sales. Analysts have significantly cut estimates and few banks have downgraded the stock, to reflect what should be a weak earnings report. Shares of Skyworks are down 33.9% in the past 12 months.

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Skyworks is best known for its mobile connectivity solutions found in popular handsets such as the iPhone and Samsung Galaxy S7. With the smartphone market approaching saturation, companies like Skyworks have seen growth rates drastically decline. Last quarter featured single digit growth for the first time in nearly 2 fiscal years with Q1 expected to turn red. Unfortunately smaller companies like Skyworks, Qrvo and Cirrus all depend heavily on iPhone sales which have seen a considerable slowdown in the past year

In an effort to reduce dependence on the smartphone market, Skyworks has built out a number of new businesses in higher growth markets. The company has positioned itself as a leader in the Internet of Things trend, with each quarter bringing new product wins. Other ventures have included smartwatches, smart TVs, and GPS tracking devices. In the meantime, earnings will continue to be influenced by the state of the smartphone market.

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Do you think SWKS can beat estimates? There is still time to get your estimate in here!

Photo Credit: Omar Jordan Fawahl