Why Skyworks Solutions Is Up 44% So Far This Year

Investors have had good reason to upbeat about the U.S. semiconductor company's long-term prospects, which has been consistently beating analysts' earnings estimates.

Chris Neiger
Chris Neiger
Jul 24, 2017 at 10:24AM
Technology and Telecom

What happened

Skyworks Solutions' (NASDAQ:SWKS) stock price has climbed 44% so far in 2017, according to data provided by S&P Global Market Intelligence, after the Massachusetts-based semiconductor manufacturer beat analysts' estimates for the first three quarters of fiscal 2017.

So what

Investors boosted Skyworks' share price in January after the company reported revenue of $914 million and earnings per share of $1.61 for its fiscal Q1. Those revenues were actually down 1.3% year over year, and net income was down just over 3%, but both figures were higher than analysts' consensus estimates, and investors pushed the stock price up nearly 23% that month. Investors were also pleased to see the company launch a new $500 million share-repurchase plan to replace its earlier $400 million plan.

Stock chart graphic.

Image source: Getty Images.

The company again beat the analysts' earnings consensus in its second quarter: Skyworks reported non-GAAP EPS of $1.45 versus the consensus forecast of $1.40.

Shares lost some of their gains going into June and early July, but then spiked again after the company's fiscal Q3 report. Revenue that quarter jumped 20% year over year to $901 million, and non-GAAP EPS popped by 27% to $1.57. The company also increased its quarterly dividend by 14%, which helped push the company's share price higher. 

Now what

Skyworks has forecast that its revenue will climb 17% year over year in its fiscal fourth quarter, which would amount to a record $980 million, and non-GAAP EPS is expected to land at $1.75. If it hits those targets, investor sentiment should remain optimistic. If all that weren't enough, the company still has $1.4 billion in cash, and no debt -- two factors that should help keep its investors even happier as it to continues to to grow.