Skyworks Solutions (SWKS) Q1 profit drops 10% but beats estimates

Skyworks Solutions Inc. (NASDAQ: SWKS) reported a 10% drop in earnings for the first quarter of fiscal 2020 due to weak top-line performance. However, the results exceeded analysts’ expectations. Further, the semiconductor company guided second-quarter revenue and earnings above the consensus view.

Net income fell by 10% to $257.1 million or $1.50 per share. Adjusted earnings dropped by 8% to $1.68 per share. Revenue decreased by 8% to $896.1 million. Analysts had expected EPS of $1.65 on revenue of $880.6 million for the first quarter.

Read: Marvell Technology stock nears 14-year high

Looking ahead into the second quarter, the company expects revenue in the range of $800-820 million and adjusted earnings of $1.46 per share. The consensus estimates EPS of $1.40 on revenue of $788.38 million. For the March quarter, the company expects new content opportunities and the ramp of its Sky5 solutions to drive better-than seasonal results.

The company’s board of directors has declared a cash dividend of $0.44 per share of its common stock. The dividend is payable on March 3, 2020, to stockholders of record at the close of business on February 11, 2020.

For the first quarter, the company said the results exceeded its expectations backed by global demand for its high-performance connectivity engines. The highly advanced Sky5 platform is fueling market adoption of 5G across a broadening customer set. The company believes its solutions will provide a critical connection, ensuring peak performance for 5G and Internet of Things usage cases.

Read: Western Digital stock in recovery stance

The company sees that 5G opportunity will go well beyond the handset and this could certainly be a major catalyst for revenue and content. The 5G technology will continue to dominate in the IoT, machine-to-machine, automotive, healthcare, industrial, and education domains as there remained really no end to the markets for this technology.

The IoT is likely to be a major opportunity for Skyworks due to its large scope and probably bigger sphere for a certain period of time. The mix of IoT along with 5G could spur revenue growth for Skyworks as the company continues to invest a lot in 5G.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.