Skyworks Exceeds Q3 FY13 Revenue and EPS Guidance

Skyworks Exceeds Q3 FY13 Revenue and EPS Guidance

  • Delivers $436.1 Million in Revenue, Up 12 Percent Year-over-Year
  • Expands Non-GAAP Gross Margin to 44.0% (43.2% GAAP) and Non-GAAP Operating Margin to 25.7% (19.3% GAAP)
  • Posts $0.54 in Non-GAAP Diluted EPS ($0.34 GAAP)
  • Repurchases 4 Million Shares of Common Stock
  • Guides to $475 Million in Revenue, with Continued Margin Improvements Yielding $0.62 of Non-GAAP Diluted EPS for Q4 FY13

WOBURN, Mass.--(BUSINESS WIRE)-- Skyworks Solutions, Inc. (NAS: SWKS) an innovator of high performance analog semiconductors enabling a broad range of end markets, today reported third fiscal quarter 2013 results for the period ending June 28, 2013. Revenue for the quarter was $436.1 million, up 12 percent when compared to $389.0 million in the third fiscal quarter of 2012.

On a non-GAAP basis, operating income for the third fiscal quarter of 2013 was $111.9 million, or 25.7 percent of sales, up from $91.7 million in the comparable period a year ago. Non-GAAP diluted earnings per share for the third fiscal quarter of 2013 was $0.54, a penny better than the Company's guidance, and a 20 percent increase from the $0.45 in the third fiscal quarter of 2012. On a GAAP basis, operating income for the third fiscal quarter of 2013 was $84.3 million and diluted earnings per share was $0.34.

"Skyworks' outperformance and outlook for sustainable above market growth reflects our progress towards becoming a highly diversified analog semiconductor market leader," said David J. Aldrich, president and chief executive officer of Skyworks. "We are capturing margin-accretive content across a broad set of end markets spanning automotive, industrial, smart energy, home automation, medical, mobility and cloud computing. Leading customers within each of these targeted markets are increasingly requiring always-on connectivity and enhanced power efficiency which intersects with our core competencies. Our system-level innovations and scale advantages are translating into accelerating top line growth, margin expansion and, most importantly, returns well in excess of our cost of capital. Accordingly, Skyworks is well positioned to capitalize on the Internet of Things tsunami and to outpace the broader analog semiconductor market while increasing shareholder value."

Q3 Business Highlights

  • Enabled home sensor networks at an emerging global home health care provider
  • Launched the industry's lowest noise LNAs supporting GPS, broadband and satellite communication applications
  • Secured telematics and infotainment system design wins with a strategic global automotive supplier
  • Powered Belkin, Cisco and Netgear 802.11ac enterprise routers
  • Ramped voltage regulators across LTE data cards
  • Commenced shipments of wireless networking and ZigBee® solutions in support of security sensors, smoke alarms, motion detectors and touch pads
  • Supported educational tablets and ebooks with backlighting and panel power management semiconductors
  • Gained connectivity and analog control IC content at Huawei, Lenovo and ZTE
  • Captured multiple front-end and wireless networking sockets on Qualcomm LTE reference designs
  • Introduced silicon-based ultra-high speed switching technology for carrier aggregation applications
  • Recorded a 3-fold increase in 4G base station content gains via highly integrated radios incorporating mixer, down converter and IQ modulator functionality

Fourth Fiscal Quarter 2013 Outlook

"Given new program launches and an expanding product pipeline, we expect a strong second half to 2013," said Donald W. Palette, vice president and chief financial officer of Skyworks. "Specifically, for the current quarter, we anticipate revenue of $475 million, gross margin expansion to the 44.0 to 44.5 percent range and $0.62 of diluted earnings per share, each on a non-GAAP basis."

For further information regarding use of non-GAAP financial measures in this press release, including a reconciliation to the most comparable GAAP financial measures, please refer to the Discussion Regarding the Use of Non-GAAP Financial Measures set forth below.

Skyworks' Third Fiscal Quarter 2013 Conference Call

Skyworks will host a conference call with analysts to discuss its third fiscal quarter 2013 results and business outlook today at 5:00 p.m. Eastern time. To listen to the conference call via the Internet, please visit the investor relations section of Skyworks' Web site. To listen to the conference call via telephone, please call 800-230-1085 (domestic) or 612-234-9960 (international), confirmation code: 296576.

Playback of the conference call will begin at 9:00 p.m. Eastern time on July 18, and end at 9:00 p.m. Eastern time on July 25. The replay will be available on Skyworks' Web site or by calling 800-475-6701 (domestic) or 320-365-3844 (international), access code: 296576.

About Skyworks

Skyworks Solutions, Inc. is an innovator of high performance analog semiconductors. Leveraging core technologies, Skyworks supports automotive, broadband, cellular infrastructure, energy management, GPS, industrial, medical, military, wireless networking, smartphone and tablet applications. The Company's portfolio includes amplifiers, attenuators, circulators, demodulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure RF subsystems, isolators, lighting and display solutions, mixers, modulators, optocouplers, optoisolators, phase shifters, PLLs/synthesizers/VCOs, power dividers/combiners, power management devices, receivers, switches and technical ceramics.

Headquartered in Woburn, Mass., Skyworks is worldwide with engineering, manufacturing, sales and service facilities throughout Asia, Europe and North America. For more information, please visit Skyworks' Web site at:

Safe Harbor Statement

This news release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation information relating to future results and expectations of Skyworks (e.g., certain projections and business trends). Forward-looking statements can often be identified by words such as "anticipates," "expects," "forecasts," "intends," "believes," "plans," "may," "will," or "continue," and similar expressions and variations or negatives of these words. All such statements are subject to certain risks, uncertainties and other important factors that could cause actual results to differ materially and adversely from those projected, and may affect our future operating results, financial position and cash flows.

These risks, uncertainties and other important factors include, but are not limited to: uncertainty regarding global economic and financial market conditions; the susceptibility of the semiconductor industry and the markets addressed by our, and our customers', products to economic downturns; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; losses or curtailments of purchases or payments from key customers, or the timing of customer inventory adjustments; the availability and pricing of third party semiconductor foundry, assembly and test capacity, raw materials and supplier components; changes in laws, regulations and/or policies that could adversely affect either (i) the economy and our customers' demand for our products or (ii) the financial markets and our ability to raise capital; our ability to develop, manufacture and market innovative products in a highly price competitive and rapidly changing technological environment; economic, social, military and geo-political conditions in the countries in which we, our customers or our suppliers operate, including security and health risks, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; fluctuations in our manufacturing yields due to our complex and specialized manufacturing processes; delays or disruptions in production due to equipment maintenance, repairs and/or upgrades; our reliance on several key customers for a large percentage of our sales; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; our ability to timely and accurately predict market requirements and evolving industry standards, and to identify opportunities in new markets; uncertainties of litigation, including potential disputes over intellectual property infringement and rights, as well as payments related to the licensing and/or sale of such rights; our ability to rapidly develop new products and avoid product obsolescence; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; lengthy product development cycles that impact the timing of new product introductions; unfavorable changes in product mix; the quality of our products and any remediation costs; shorter than expected product life cycles; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; and our ability to continue to grow and maintain an intellectual property portfolio and obtain needed licenses from third parties, as well as other risks and uncertainties, including, but not limited to, those detailed from time to time in our filings with the Securities and Exchange Commission.

The forward-looking statements contained in this news release are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Note to Editors: Skyworks and Skyworks Solutions are trademarks or registered trademarks of Skyworks Solutions, Inc. or its subsidiaries in the United States and in other countries. All other brands and names listed are trademarks of their respective companies.

Three Months EndedNine Months Ended
June 28,June 29,June 28,June 29,
(in millions, except per share amounts)201320122013 2012 
Net revenue$436.1$389.0$1,315.0$1,147.5
Cost of goods sold247.9223.7757.5 658.1 
Gross profit188.2165.3557.5489.4
Operating expenses:
Research and development56.656.1171.0155.9
Selling, general and administrative40.337.5118.1120.6
Amortization of intangibles7.08.622.424.3
Restructuring and other charges-1.16.4 7.8 
Total operating expenses103.9103.3317.9308.6
Operating income84.362.0239.6180.8
Interest expense---(0.5)
Other income (expense), net0.20.1(0.9)(0.1)
Income before income taxes84.562.1238.7180.2
Provision for income taxes18.812.844.8 39.7 
Net income$65.7$49.3$193.9 $140.5 
Earnings per share:
Weighted average shares:
Three Months EndedNine Months Ended
June 28,June 29,June 28,June 29,
(in millions)2013 2012 2013 2012 
GAAP gross profit$188.2$165.3$557.5$489.4
Share-based compensation expense [a]
Acquisition-related expense [b]1.2 0.7 1.3 3.6 
Non-GAAP gross profit$191.8 $168.1 $566.3 $500.0 
Non-GAAP gross margin %44.0%43.2%43.1%43.6%
Three Months EndedNine Months Ended
June 28,June 29,June 28,June 29,
(in millions)2013 2012 2013 2012 
GAAP operating income$84.3$62.0$239.6$180.8
Share-based compensation expense [a]18.118.654.153.7
Acquisition-related expense (credit) [b]1.3(4.0)2.18.1
Amortization of intangibles7.08.622.424.3
Restructuring and other charges [c]-
Litigation settlement gains, losses and expenses [d]
Deferred executive compensation0.1 0.1 0.4 0.4 
Non-GAAP operating income$111.9 $91.7 $326.4 $280.9 
Non-GAAP operating margin %25.7%23.6%24.8%24.5%
Three Months EndedNine Months Ended
June 28,June 29,June 28,June 29,
(in millions)2013 2012 2013 2012 
GAAP net income$65.7$49.3$193.9$140.5
Share-based compensation expense [a]18.118.654.153.7
Acquisition-related expense (credit) [b]1.3(4.0)2.18.1
Amortization of intangibles7.08.622.424.3
Restructuring and other charges [c]-
Litigation settlement gains, losses and expenses [d]
Deferred executive compensation0.
Amortization of discount on convertible debt [e]---0.3
Tax adjustments [f]10.5 7.1 21.6 21.3 
Non-GAAP net income$103.8 $86.1 $302.3 $262.2 
Three Months EndedNine Months Ended
June 28,June 29,June 28,June 29,
2013 2012 2013 2012 
GAAP net income per share, diluted$0.34$0.26$1.01$0.74
Share-based compensation expense [a]
Acquisition-related expense (credit) [b]0.01(0.02)0.010.04
Amortization of intangibles0.040.04