Apple supplier Skyworks jumps after better-than-feared forecast
By Sonam Rai
(Reuters) - Shares of Skyworks Solutions Inc rose as much as 13 percent on Tuesday after the company, whose radio frequency chips are used in iPhones, gave a current-quarter forecast that was not as dour as other Apple Inc suppliers.
Skyworks' March-quarter revenue forecast of $910 million at the mid-point and a profit outlook of $1.60 per share on that basis missed Wall Street estimates of revenue of $921 million and profit of $1.61 per share, per Thomson Reuters I/B/E/S.
"While the Apple weakness is impacting everyone in the supply chain, Skyworks is experiencing less of a downturn than most as it expands its broad markets business and captures content in other handset providers," Northland Capital Markets analyst Tom Sepenzis said in a client note.
Oppenheimer analyst Rick Schafer said that for Skyworks, the lower demand from Apple was being offset by the increasing use of its chips in Samsung and Chinese smartphones.
Skyworks itself said it expects its Chinese customers to rebound in the March quarter, contrary to comments from Qualcomm Inc and Qorvo Inc.
"We feel very confident of what we've won. And a lot of the technology you're going to start to see in the second half," Chief Executive Liam Griffin said on a conference call late on Monday, after Skyworks reported a better-than-expected quarterly profit.
In contrast, Cirrus Logic Inc, whose audio chips are used in Apple's iPhones, reported quarterly revenue and profit below estimates, citing an unanticipated weakness in smartphone demand late in December.
Northland's Sepenzis said that though Skyworks' revenue would come down modestly moving forward, its earnings would actually increase due to the new lowered U.S. tax rate.
Skyworks shares hit a session high of $106.74 before easing to $102.50, still up 8.3 percent and giving the biggest boost to the Philadelphia SE Semiconductor Index.
Cirrus shares were down 2.3 percent at $43.82, making then the second-biggest percentage loser on the chip index.
(Reporting by Sonam Rai in Bengaluru; Editing by Savio D'Souza)
