So analysts were expecting too much from AAPL this quarter, and the stock is dropping. SWKS is dropping with it (down about 6% as I write this). The interesting thing from the press release was that “iPhone revenue [was] up 59 percent over last year”.
I’m wondering if people expected outsized results from Apple because Samsung has been struggling? Perhaps people think this means fewer overall smart phone sales, which would hurt that portion of Skyworks’ business?
So I think the question is whether AAPL’s “miss” will actually translate into poorer performance for SWKS, warranting the simultaneous drop. I still think that the doubling of the SWKS dividend is likely management’s hint that things are going well for them, but that’s obviously pure speculation on my part.
What are others thinking?
Neil
Long AAPL, SWKS
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My numbers show with price @ $120 AH, P/E is 13.86 and 1YPEG 0.31 . I added more to my position AH @ 121.
They bought back another 1% of outstanding shares. At this rate they may buy back the entire company.
LegoAbs
1 Like
“iPhone revenue [was] up 59 percent over last year”
From a liveblog:
“cash flow was $15 billion, also a new record”
“earnings per share of $1.85, a 45% YOY increase”
I wish I could “miss” this well 
Graham
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Most of the AAPL suppliers are down with AAPL’ stock:
http://seekingalpha.com/news/2643615-apple-suppliers-sell-of…
Interestingly, the Apple numbers were pretty darn good with huge revenue and earnings gains for such a huge market cap company.
Oddly, these suppliers must have had huge gains based on huge sales from Apple.
But investors are not happy that it didn’t beat the “whisper numbers”…not even analysts published expectations anymore…the whispers.
The market is in a ever increasing demand for surprise upside earnings to be adequately satiated…
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I’m listening to the call. Analysts seem very concerned about future iPhone sales and growth – a lot of questions about that. I’m guessing the market is concerned about guidance for next quarter, but of course it’s the quarter when Apple tends to transition to new products, so it’s hard to extrapolate too much from those numbers IMHO.
Cook seems very bullish. They’re seeing more people switch from Android than ever before, massive growth in Asian countries (87% unit growth in China, doubled growth in Korea where unit growth has actually shrunk overall, etc). Share is still low in emerging markets, providing headroom. And only 27% of existing iPhone users worldwide have upgraded to 6 or 6 Plus, so also a lot of runway for future upgrades. Extremely high customer satisfaction ratings.
When asked about the future of China, Cook is very bullish. While he admits the equity market turmoil could create short-term volatility ins ales, he thinks the worries are over-stated. Still only 12% LTE penetration in China, and rise of middle class is continuing and “transforming” China.
Neil
12 Likes
Analysts seem very concerned about future iPhone sales and growth
They have been that way ever since Jobs died.
You could have made a lot of money by ignoring them.
They have no more insight into Apple than anybody here on this board. We know they are great devices, we know they are very profitable, we know greater number of Android (and Windows) users switch each year. The more they interconnect the more useful they will be.
Is iStuff getting worse or better? Many users like me don’t even look beyond Apple anymore for computing or phone needs. So I just grit my teeth and pay up for the best, the most reliable, the most elegant.
This sounds like a good SKWKS buying opportunity, but I don’t want to be too overweight. Hopefully SKWKS will be like Apple and buy back stock at good prices. Because some companies are pressed for the need to cover oversized option bonuses so buy back at the worst times , when stock prices are high. Good for management but not so good for stockholders.
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What are others thinking?
In the grand scheme of things, I don’t think it matters whether Apple sold 47.5M iPhones or 52M iPhones last quarter. What matters to SWKS is the overall global sales of smartphones and specifically the speed with which the switch from 3G to 4G to 5G occurs. SWKS is in the iPhone but it’s also in most of the other phones. I believe that analysts may be overly focused on Apple unit sales when they should be looking at the overall business growth to SWKS (including other products besides smartphones). On the other hand they may been taking the iPhone numbers in the context of the recent Samsung S6 sales numbers which also fell short. The difference of 4.5M iPhones in one quarter probably translates into $14.5M less in revenue to SWKS. If the iPhones were short and the S6 sales were short then were the overall smartphone sales short or were analysts just overly optimistic. I think we will need to wait until Thursday AMC until we see what actually happened to the overall business and what management has to say on the call.
Chris
5 Likes
I’m thinking that the sympathetic drop in SWKS as a reaction to AAPL guidance is an over-reaction (which I’m beginning to understand to be the norm).
First, $1.85 EPS met the consensus of the 39 analysts who follow AAPL. YoY revenue growth for the iPhone was 59%, YoY growth in enterprise earnings was 44%, and TTM growth in enterprise earnings was 40%. And SWKS as an AAPL supplier takes a hit on this performance? What would a good quarter look like?
Second, just how much SWKS revenue is from AAPL? For some reason 15% sticks in my head - I don’t know if I read that somewhere or just fabricated it based on nothing factual - of course reading it somewhere might amount to the same thing. Anyway, AAPL is certainly not the only customer for SWKS.
Third, it’s customary for AAPL to provide light guidance, it’s easier to beat light numbers. You’d think that the “analysts” would be on to this game, but somehow it continues to elude them. It’s the old saw, Fool me once, shame on you. Fool me twice, shame on me. Fool me repeatedly and that’s proof I’m dumber than a post with an IQ rivaling that of a carrot.
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