Skyworks Solutions SWKS reported non-GAAP earnings of $1.55 per share in fourth-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 29.5% year over year.

Revenues of $1.02 billion dipped 15.9% on a year-over-year basis but surpassed the consensus mark by 0.31%.

Mobile revenues contributed nearly 65% to total revenues and increased 21% sequentially. This growth was attributed to the normalization of customer orders and inventory levels, as well as support for seasonal product ramps.

In the fourth quarter of fiscal 2024, Skyworks gained design wins in 5G for premium Android smartphones and increased its Wi-Fi 7 pipeline with major partners like Linksys, Charter, and NETGEAR. 

The company expanded in automotive for 5G front-end modules, infotainment, and digital isolators, showing increased design win momentum.

Broad markets contributed nearly 35% to total revenues and up $1 million sequentially. It showed signs of stabilization with demand in edge IoT and automotive electrification, supported by increasing adoption of Wi-Fi 6E and Wi-Fi 7 systems.

SWKS’s shares have lost 22.6% against the Zacks Computer and Technology sector’s rise of 39.7% year to date. 

Skyworks was hurt by high inventory levels, uneven demand across segments, and muted global demand in automotive and industrial markets. These factors may put downward pressure on SWKS’s shares.

SWKS Operating Details

Non-GAAP gross margin contracted 70 basis points (bps) on a year-over-year basis to 46.5%.

Research & development expenses, as a percentage of revenues, increased 390 bps year over year to 16%.

Selling, general and administrative expenses increased 120 bps to 7.2% in the reported quarter.

Non-GAAP operating margin contracted 600 bps on a year-over-year basis to 26.7% in the reported quarter.

SWKS Balance Sheet & Cash Flow

As of Sept. 27, 2024, cash & cash equivalents and marketable securities were $1.57 billion compared with $1.28 billion as of June 28, 2024.

Long-term debt was $994.3 million as of Sept. 27, 2024, compared with $994 million as of June 28, 2024.

Cash generated by operating activities was $476 million in the quarter under discussion compared with $273.5 million in the prior quarter.

Free cash flow was $393.2 million, with a 38.4% free cash flow margin.

Skyworks paid dividends worth $112 million in the reported quarter.

SWKS Initiates 1Q25 Guidance

For the first quarter of fiscal 2025, the company expects revenues between $1.05 billion and $1.08 billion, up 4% sequentially at the mid-point.

Non-GAAP diluted shares are expected to be $1.57 per share.

SWKS Zacks Rank & Stocks to Consider

Skyworks currently carries a Zacks Rank #3 (Hold).

Adobe ADBE, BiliBili BILI and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adobe shares have lost 11.7% year to date. ADBE is set to report its fourth-quarter 2024 results on Dec. 11.

Bilibili shares have gained 73.3% year to date. BILI is set to report its third-quarter 2024 results on Nov. 14.

NVIDIA shares have gained 199.5% year to date. NVDA is set to report its third-quarter fiscal 2025 results on Nov. 20.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Skyworks Solutions, Inc. (SWKS) : Free Stock Analysis Report

Adobe Inc. (ADBE) : Free Stock Analysis Report

Bilibili Inc. Sponsored ADR (BILI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research