In what has come to be routine, Skyworks Solutions achieved another impressive quarter of design wins, revenue and earnings growth to cap its 2017 fiscal year. Quarterly revenue was $985 million in Q4, a sequential increase of 9 percent and 18 percent above the year-ago quarter.
Integrated mobile products contributed approximately 64 percent of the quarter’s revenue, broad markets (e.g., IoT and Wi-Fi) 26 percent and power amplifiers 10 percent. The broad markets segment exceeded $250 million in revenue for the first time.
Skyworks attributed the quarter’s growth to strong smartphone positions with Apple, Samsung and Chinese suppliers Huawei, Oppo, Vivo and Xiaomi. In the broad markets segment, wins at Bosch, Cisco, DJI, FitBit, Hyundi, Nest and Sonos complemented new products introduced for the new 802.11ax Wi-Fi standard and 5G MIMO infrastructure.
Q4 GAAP gross margin was 50.7 percent, and GAAP operating margin was 35.1 percent; as is usual, non-GAAP operating margin was higher, at 38.5 percent. Diluted earnings per share (EPS) was $1.51, up 15 percent year-over-year, with non-GAAP EPS of $1.82, up 24 percent year-over-year.
For the full fiscal year, Skyworks achieved record revenue of $3.65 billion, an increase of 11 percent above the revenue in fiscal 2016. Foxconn, Samsung and Huawei were the top three customers for the year, contributing approximately 40 percent, “low teens” and 10 percent of the revenue, respectively.
The company generated $1.5 billion in cash from operations, spent $300 million for capital expenditures and ended the fiscal year with $1.6 billion in cash and no debt. Half of the cash is offshore (i.e., outside the U.S.).
During the earnings call, Liam Griffin, Skyworks’ CEO, was asked how the company plans to use its cash and its strategy for acquisitions. He responded, “We’re up for diversification as long as it enhances the franchise. We’re not as interested in things that are just totally adjacent on a different vector to diversify the portfolio.”
For the first fiscal quarter of 2018, Skyworks’ guidance is for revenue to increase 15 percent year-over-year to $1.05 billion, with EPS of $1.91, up 19 percent year-over-year.
Despite the excellent quarter and Skyworks’ strong market position, the company’s stock closed down 4.4 percent the day after the earnings call.