Yahoo Finance Skyworks Solutions Inc (SWKS) (Q2 2024) Earnings Call Transcript Highlights: Surpassing ...
Revenue: $1.046 billion for Q2 fiscal 2024.
Earnings Per Share (EPS): $1.55, above guidance by $0.03.
Operating Cash Flow: $300 million.
Gross Margin: 45%, down 140 basis points sequentially.
Net Income: $251 million.
Free Cash Flow: $273 million.
Operating Income: $279 million, with an operating margin of 26.7%.
Inventory Levels: Reduced by $91 million to $836 million.
Capital Expenditures: $28 million, less than 3% of revenue.
Dividends Paid: $109 million.
Cash Balances: Grew to over $1.2 billion.
Debt: $1 billion.
Q3 Fiscal 2024 Revenue Outlook: Projected at $900 million, plus or minus 2%.
Q3 Gross Margin Forecast: Expected to be between 45% to 47%.
Q3 EPS Guidance: Anticipated to be $1.21 at the midpoint of the revenue range.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you provide more details on the excess inventory in the mobile business and specify if this issue extends beyond the Android space? A: (Kris Sennesael, Senior VP & CFO, Skyworks Solutions, Inc.) Yes, towards the end of March, we observed below-normal seasonal trends with lower end market demand, leading to inventory buildup across our mobile business. This trend continued into April, influencing our guidance for the June quarter. We anticipate a 20-25% sequential decline in our mobile business, primarily due to the need to clear excess inventory.
Q: What are the expectations for inventory headwinds and product launches in the second half of the year? A: (Kris Sennesael, Senior VP & CFO, Skyworks Solutions, Inc.) We guide one quarter at a time, making it challenging to predict the next three to four quarters. However, we expect most inventory clearance to complete in the June quarter.
Q: Can you discuss any correlation between the inventory issues and potential changes in content for upcoming mobile programs? A: (Liam K. Griffin, CEO, President & Chairman of the Board, Skyworks Solutions, Inc.) The situation with our largest customer was unique, affecting our content expectations for the upcoming cycle. Despite this, we remain strategically aligned with this customer and anticipate engaging in future initiatives.
Q: How do you view the trajectory of the Android business and its impact on revenue? A: (Kris Sennesael, Senior VP & CFO, Skyworks Solutions, Inc.) Our Android business has stabilized, approaching $100 million per quarter. We've seen a stabilization in inventory and expect year-over-year growth as new design wins come into effect.
Q: What are the prospects for gross margin improvement in the mobile and broad markets? A: (Kris Sennesael, Senior VP & CFO, Skyworks Solutions, Inc.) We expect gross margin improvements driven by cost reductions, favorable mix shifts, and better factory utilization. We anticipate continuous margin expansion throughout 2024.
Q: Can you elaborate on the recovery in broad markets and the outlook for segments like IoT, automotive, and industrial? A: (Liam K. Griffin, CEO, President & Chairman of the Board, Skyworks Solutions, Inc.) We're seeing growth opportunities in automotive and industrial segments, with increasing connectivity and electrification driving demand. The broad markets are diversifying, and we're optimistic about capturing a wider range of opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
