The company generally experiences seasonal peaks during the fourth and first quarters, primarily as a result of the increased worldwide production of consumer electronics in anticipation of increased holiday sales, whereas its second and third fiscal quarters are typically lower and in line with seasonal industry trends.
Analysts expect the company’s earnings to decline by 17.70% to $1.35 per share and revenue to drop by 14.10% to $768.63 million for the third quarter. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters.
For the second quarter, Skyworks reported a 22% drop in earnings due to lower revenue and higher research and development expenses. The company experienced an increase in R&D expenses due to its intention to strengthen its business model and momentum across its high-growth broad markets and Internet of Things (IoT) portfolio.
For the third quarter, the company lowered revenue outlook to the range of $755 million to $775 million from the previous range of $815 million to $835 million and adjusted earnings guidance of $1.34 at the mid of the revenue range compared to the prior estimate of $1.50 per share.
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Market-wise, the company competes with global semiconductor manufacturers, including Analog Devices (NASDAQ: ADI), Broadcom (NASDAQ: AVGO), Maxim Integrated Products (NASDAQ: MXIM), Murata Manufacturing, NXP Semiconductors (NASDAQ: NXPI), Qualcomm (NASDAQ: QCOM), and Qorvo (NASDAQ: QRVO).
Skyworks expects that intense price and product competition will continue as it faces significant competition in the markets. In addition, the growth opportunities in communications electronics, global expansion, and policy changes could aid in additional competitors entering the market. For tackling this, the company has resorted to investments in new products and services apart from acquisitions.