Wireless chip specialist Skyworks (SWKS -1.23%) reported generating $810 million in revenue and $1.47 in earnings per share (EPS) during its second quarter, with the former being in line with expectations and the latter coming in a bit ahead of those forecasts

For the coming quarter, Skyworks told investors to expect revenue of between $815 million and $835 million and EPS of $1.50. The midpoint of that range is $825 -- slightly below expectations going into the report of $827.85 million. The EPS guidance, however, is in line with expectations.

A chip with a Skyworks logo on it.

Image source: Skyworks.

There's more to a business than just the numbers it reports and guides to, so, with that in mind, here are three important insights that management provided on its most recent earnings call.

A further mix shift

Last quarter, 67% of the company's revenue came from sales of chips into mobile devices, meaning that the remaining 33% came from outside mobile. (Skyworks refers to such business as its "broad markets" segment.) The company's broad markets made up 27% of its revenue last quarter, so it certainly saw its business mix shift from the prior quarter.

"Our March quarter results were impacted by unit weakness in mobile, particularly across China," said CEO Liam Griffin on the call. "In contract, our broad markets business continues to outperform and is on path for double-digit growth again in fiscal [2019]." 

Now, while it is true that there should be a seasonal pickup in the company's mobile business in the coming quarters (potentially diluting the mix of its broad markets business), the company's broad markets business is still outpacing its mobile business on a year-over-year basis. This means that, over the long term, Skyworks is becoming more diversified. 

China insight

Griffin indicated that its business with China-related smartphone makers was weak. Interestingly, he indicated that while Huawei -- the top vendor of smartphones in China -- is actually doing well, the smaller players in the region were "softer." 

"As we start to look out, we continue to see Huawei being strong, not only in mobile but also in the infrastructure side, and obviously, a much more significant player than some of the smaller smartphone folks," said Griffin. 

What caught my attention, though, were Griffin's thoughts about what the future might hold. He indicated that the company's dollar content in the smaller Chinese smartphone players' devices is "pretty light" and, as a result, once the transition to 5G wireless happens, "the content gains in the smaller accounts could actually be, on a ratio basis, even more impactful than what we have in a customer like Huawei today." 

As far as China goes now, though, Griffin said the company expects to "see improving conditions in Q3 and also into the second half." 

Gross margin improvements

Last quarter, Skyworks reported gross margin of 50.7%. On the call, CFO Kris Sennesael, in response to an analyst's question, indicated that the company will see "further gross margin improvements in the second half."

Sennesael indicated those will come through "operational efficiency improvements," as well as the introduction of "new, more complex products to the market in the second half." 

A higher gross margin percentage means that a larger portion of the company's revenue is translated into gross profit, which should ultimately mean better net income. 

The executive finished his answer to the question by saying that the company "will continue to work toward our target model of 53% gross margin."