Skyworks Solutions (SWKS) Q4 2019 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Skyworks Solutions, Inc. (NASDAQGS:SWKS) is scheduled to report Q4 earnings results on November 12, 2019. The company is expected to report earnings of $1.50/share on revenue of $825.0 million. The consensus earnings per share (EPS) of $1.50/share is based on a poll of 24 analysts and represents a decline of -22.7% over the same quarter last year when the company reported earnings of $1.94/share.

The revenue forecast of $825.0 million based on a poll of 20 analysts implies a year-over-year (YoY) decline of -18.2%. Last year the company reported $1.008 billion in revenue for the quarter.

Expected to report EPS decline of -$0.44/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $825.00 $1,008.40 -18.2%
EPS $1.50 $1.94 -22.7%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Skyworks Solutions for this earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $1.34 $1.35 0.7% Beat
Q2, 2019 $1.43 $1.47 2.8% Beat
Q1, 2019 $1.82 $1.83 0.5% Beat
Q4, 2018 $1.91 $1.94 1.6% Beat
Q3, 2018 $1.59 $1.64 3.1% Beat
Q2, 2018 $1.60 $1.64 2.5% Beat
Q1, 2018 $1.91 $2 4.7% Beat
Q4, 2017 $1.75 $1.82 4.0% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Skyworks Solutions’s stock price performance? It’s more important for some companies than for others. In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 28, 2019, the stock price reacted by increasing by 3.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-07 $77.66 $80.27 3.4% Increase
2019-05-02 $88.48 $87.60 -1.0% Decline
2019-02-05 $74.87 $84.69 13.1% Increase
2018-11-08 $82.65 $76.66 -7.2% Decline

Fundamentals And Technical Analysis

Skyworks Solutions is currently trading at $100.38/share, down -0.1% for the day. The company is trading at approximately 106.3% of its 52 week high of $94.39/share. The company’s stock price is up 29.3% since the last earnings report and up 2.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 77.95 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.

Skyworks Solutions Stock Price

The current share price implies a price-to-earnings (P/E) multiple of 18.6x and a forward P/E multiple of 16.1x. Skyworks Solutions’s current share price also implies a price-to-book (P/B) multiple of 4.2x. The following table summarizes some other key fundamental ratios:

Data as of November 11, 2019
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date June 28, 2019
Stock Price (Current) $100.38
P/E Ratio 18.6x
P/E Ratio (Fwd) 16.1x
PEG Ratio -11.0
Total Debt to Capital (%) 0.0%
Levered Free Cash Flow $731.7 million
Enterprise Value / EBITDA 11.6x

Company Profile: Skyworks Solutions, Inc.

Skyworks Solutions, Inc. is a large-cap stock with a market capitalization of $17.246 billion and a total enterprise value of $16.311 billion. The company operates in the Information Technology sector and Semiconductors & Semiconductor Equipment industry.

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products, including intellectual property worldwide. Its product portfolio includes amplifiers, antenna tuners, attenuators, circulators/isolators, DC/DC converters, demodulators, detectors, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, LED drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase locked loops, phase shifters, power dividers/combiners, receivers, switches, synthesizers, technical ceramics, voltage controlled oscillators/synthesizers, and voltage regulators.

The company provides its products for use in the aerospace, automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet, and wearable markets. It sells its products through direct sales force, electronic component distributors, and independent sales representatives.

Skyworks Solutions, Inc. has a collaboration agreement with MediaTek Incorporated to deliver standards-based 5G solution. The company was founded in 1962 and is headquartered in Woburn, Massachusetts.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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