Skyworks (SWKS) Q3 Earnings Meet Estimates, Revenues Down Y/Y

Core Insights - Skyworks Solutions (SWKS) reported third-quarter fiscal 2024 non-GAAP earnings of $1.21 per share, matching the Zacks Consensus Estimate but declining 30.1% year over year [1] - Revenues for the quarter were$ 905.5 million, a decrease of 15.5% year over year, and below the consensus estimate of $913 million [1] - Mobile revenues accounted for nearly 61% of total revenues, experiencing a sequential decline of 21% [1] - Broad markets contributed approximately 39% to total revenues, with a sequential increase of 1% [1] Operating Details - Non-GAAP gross margin decreased by 160 basis points year over year to 46%, but improved by 100 basis points sequentially due to cost-reduction efforts and a favorable mix shift [2] - Research & development expenses rose by 390 basis points year over year to 17.7% of revenues [2] - Selling, general and administrative expenses increased by 70 basis points to 7.9% in the reported quarter [2] - Non-GAAP operating margin contracted by 630 basis points year over year to 24.2% [2] Balance Sheet & Cash Flow - As of June 28, 2024, cash and cash equivalents along with marketable securities totaled$ 1.28 billion, up from $1.2 billion as of March 29, 2024 [3] - Long-term debt remained stable at$ 994 million as of June 28, 2024 [3] - Cash generated by operating activities was $273.5 million, down from$ 300 million in the previous quarter [3] - Free cash flow was reported at $249.1 million, with a free cash flow margin of 27.5% [3] - The company paid dividends totaling$ 109 million and repurchased 764,000 shares for $77 million during the quarter [3] Guidance - For the fourth quarter of fiscal 2024, Skyworks expects revenues between$ 1 billion and $1.04 billion, with earnings projected at$ 1.52 per share at the midpoint of this guidance [4] - Gross margin is anticipated to be between 46% and 47%, while operating expenses are expected to range from $197 million to$ 203 million [4] Market Position - Skyworks currently holds a Zacks Rank 3 (Hold) [5] - Year-to-date, SWKS shares have returned 4.6%, compared to the Zacks Computer and Technology sector's growth of 18.2% [5] - Other stocks in the sector with better rankings include Shopify (Rank 1), Apple (Rank 2), and Digital Ocean (Rank 1) [5]