Skyworks Solutions, Inc. (SWKS) reported revenues of $238.1 million in the second quarter of fiscal 2010, up 38% year over year, and exceeded management’s guidance of $230 million – $235 million.

Skyworks continues to capitalize on the rapidly expanding opportunity for analog semiconductor solutions fueled by the increasing demand for smart phone, broadband access, network infrastructure and smart grid applications.

The increasing demand for Smartphones continues to drive growth for the company as Skyworks is uniquely positioned as a supplier to all leading smartphone OEMs. Wireless local area networking is being integrated within gaming consoles, LED televisions, Blu-Ray players and smart appliances. Skyworks continues to build upon these trends.

Network infrastructure also provides opportunity for growth as mobile operators begin to install new base stations, routers and upgrade their network equipment to avoid network traffic jams and to preserve their highly profitable data service revenue.

Skyworks continues to leverage its standard analog catalog business to address a variety of mature as well as new vertical markets including automotive, avionics, satellite, medical, military and industrial.

Gross margin came in at 42.3%, up 230 basis points year-over-year, driven by improved product mix, a volume ramp of new products, improved manufacturing efficiencies, yield improvements and significant material cost reductions.

Operating margin came in at 20.5% compared to 12.3% in the year-ago quarter. Net income came in at $27.7 million or 15 cents per share compared to a net loss of $5.6 million or 3 cents per share in the year-ago quarter. Excluding one-time items but including stock-based compensation expense, net income per share came in at 19 cents, beating the Zacks Consensus Estimate by a penny.

During the quarter, Skyworks generated $60 million in cash from operating activities. The company retired convertible debt of $40 million and invested $20 million in capital expenditures. Skyworks exited the quarter with cash and cash equivalents of $412 million or $2.25 on a per share basis.

Going forward, management expects a 10% to 15% sequential revenue growth in the third quarter based on strong demand across multiple markets. The three macro trends driving this growth are — increasing use of broadband access across both wireless and wire lined networks, growing consumer demand for audio, video, text and social networking and emergence of a host of new wireless applications.

The company expects a strong second half in 2010. This implies a revenue guidance of $261.9 million — $273.8 million. Gross margin is projected at 43% and operating margin at 23%. Excluding stock-based compensation expenses and restructuring charges, EPS is expected at 30 cents per share.

Headquartered in Woburn, Massachusetts, Skyworks Solutions designs, manufactures and markets a broad range of high performance analog and mixed-signal semiconductors that enable wireless connectivity.
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