SWKS Reports 2016 Q2 Earnings

Investment Analysis Clubs Saul’s Investing Discussions
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From the press release:

On a non-GAAP basis, operating income for the second fiscal quarter of 2016 was $285.0 million, up 10 percent from $258.9 million in the second fiscal quarter of 2015. Non-GAAP diluted earnings per share for the second fiscal quarter was $1.25, $0.01 better than guidance and up 9 percent from $1.15 in the second fiscal quarter of 2015. On a GAAP basis, operating income for the second fiscal quarter of 2016 was $257.7 million and diluted earnings per share was $1.08.

“Skyworks delivered solid financial results in the second fiscal quarter of 2016 driven by our increasing diversification and differentiated product portfolio,” said David J. Aldrich, chairman and chief executive officer of Skyworks. “Looking ahead, we are well positioned to continue capitalizing on the powerful connectivity and Internet of Things trends as we deliver higher value solutions with superior performance and functionality across new markets, applications and customers.”

So everything looks good on that front, but guidance sounds a bit weak, no?

“During the June quarter we expect to be impacted by an inventory adjustment at a large customer, partially offset with gains across broad markets and crisp operational execution,” said Donald W. Palette, executive vice president and chief financial officer of Skyworks. “Specifically, for the third fiscal quarter of 2016, we anticipate revenue of $750 million with a 200 basis point year-over-year improvement in gross margin driving non-GAAP diluted earnings per share of $1.21.”

From http://investors.skyworksinc.com/releasedetail.cfm?ReleaseID…

Here’s the latest earnings and revenue growth numbers:


Revenues (millions)		Q1		Q2		Q3		Q4			
2013				453.7		425.2		436.1		477.0		
2014				505.2		481.0		587.0		718.2		
2015				805.5		762.1		810.0		880.8
2016				926.8		775.1

EPS (non-GAAP)		        Q1		Q2		Q3		Q4			
2013				0.55		0.48		0.54		0.64		
2014				0.67		0.62		0.83		1.12	
2015				1.26		1.15		1.34		1.52
2016				1.60		1.25

Current (2016 Q2 Earnings):

Revenue Growth (millions)
2015 Q2 TTM Revenue = 2872.8
2016 Q2 TTM Revenue = 3392.7
Year Over Year Revenue Growth = 18.1%, previous quarter 30.4%

EPS Growth (non-GAAP)
2015 Q2 TTM Earnings = 4.36
2016 Q2 TTM Earnings = 5.71
Year Over Year EPS Growth = 31%, previous quarter 46.5%

P/E (Check Current Price) = 71.78/5.71 = 12.57
1YPEG = 12.57/31 = 0.41

Matt
Long SWKS
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See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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This is the part that concerns me.

"Specifically, for the third fiscal quarter of 2016, we anticipate revenue of $750 million. . .

Revenue was $810 million for the same period last year. I like to see revenue increasing, not decreasing.

Wiseguy

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So revenue growth is stalling to zero and going negative next quarter as is EPS - this is a very fast come down from a 30% growth clip in about 2 quarters. I’ve never quite held the same de facto confidence in this company as others but I’ve got to say this is not looking good.

I also see risks in this number if Apple drops faster, Qualcomm wins more of the Galaxy S phone series around the world vs the Samsung chip as well as other handsets which is expected with the Qualcomm licensing renaissance.

This is fast turning into a story stock around IoT.
Ant

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"Specifically, for the third fiscal quarter of 2016, we anticipate revenue of $750 million. . .

Revenue was $810 million for the same period last year. I like to see revenue increasing, not decreasing.

I agree, and I thought last quarter they kept touting how great the second half of 2016 was going to be?

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I agree, and I thought last quarter they kept touting how great the second half of 2016 was going to be?

I think they meant second half of calendar year 2016 with the new iPhone 7 and other new handsets.

Guidance is for the current quarter ending in June (1H 2016).

Sincerely,
Charlie

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The stock dropped below its 200 day-moving-average last September and was
unable to regain its footing since then. At that time, the chatter around
the stock was very positive and SWKS management promised EPS of $8 in two years. Since then, the stock was unable to regain the 200 line in spite of it coming down.

The stock chart was flying in the face of all the positive talk and the consensus here was that markets are stupid and technical indicators are meaningless.

Now it looks like we should have paid more attention.

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The stock dropped below its 200 day-moving-average last September and was
unable to regain its footing since then. At that time, the chatter around
the stock was very positive and SWKS management promised EPS of $8 in two years. Since then, the stock was unable to regain the 200 line in spite of it coming down.
The stock chart was flying in the face of all the positive talk and the consensus here was that markets are stupid and technical indicators are meaningless.

Now it looks like we should have paid more attention. ~ dovbgood

What will the price of SWKS be on May 10, or 20, or 30 ?

JT

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What will the price of SWKS be on May 10, or 20, or 30?

Good question. The answer is, I don’t know and I don’t care. I do not invest in stocks that sink below the 200 day-moving-average.

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What will the price of SWKS be on May 10, or 20, or 30 ?

While this line of questioning might make you feel that you won the argument, really it serves no purpose. The point is while we are bullish there are other market participants are not so bullish. That’s what the price chart tells you. So take that input and try to understand why they are bearish and it is up to you to whether agree or disagree. But if you choose to ignore that, that’s also fine. But trying to kill view points that you don’t necessarily agree serves no purpose.

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