The stock market has finally started to hit some resistance after a strong start to 2023. Yet even after a few days of pullbacks, the Nasdaq Composite (^IXIC -0.64%) isn't giving up on its recovery efforts. On Tuesday, the Nasdaq rose about half a percent as of 12:45 p.m. ET.
Those who watch the Nasdaq expect companies to generate the consistent revenue gains that growth stocks are famous for. Skyworks Solutions (SWKS 1.81%) and Take-Two Interactive Software (TTWO 0.42%) have both come a long way since their modest beginnings, and investors were happy to see both companies post financial results that signaled their ability to thrive even in tough times for the broader economy.
Skyworks looks skyward
Shares of Skyworks Solutions jumped 11% in early afternoon trading on Tuesday. The semiconductor maker reported solid results in the fiscal first-quarter ending Dec. 30 and announced a shareholder-friendly move to bring even more joy to its investors.
To be clear, Skyworks certainly saw the impact of weakness across the semiconductor industry. Revenue of $1.33 billion was down 12% year over year, and rising operating expenses took their toll on Skyworks' bottom line. Adjusted net income fell 21% to $415 million, but the resulting earnings of $2.59 per share were still better than many investors had expected to see.
Shareholders were also fairly comfortable with Skyworks' projections for the fiscal second quarter, even though they implied a sizable pullback on a sequential basis. The chipmaker sees revenue of between $1.125 billion and $1.175 billion for the period, with adjusted earnings coming in around $2.02 per share.
The board of directors at Skyworks approved a new stock repurchase program to give its investors an extra reward, devoting up to $2 billion to buying back shares. Add that to a generous dividend that yields in excess of 2% right now, and it's easier to understand why many semiconductor industry investors prefer Skyworks over some of its stingier peers.
Take-Two gets a win
Shares of Take-Two Interactive Software were up 8% in the middle of the day on Tuesday. Investors in the video game specialist came around to the company's fiscal third-quarter financial results for the period ending Dec. 31, which showed that Take-Two can hold up even when its slate of blockbuster games goes through a periodic lull.
Take-Two reported a strong jump in sales, which climbed 56% year over year to $1.41 billion. The company saw a huge surge in recurrent spending from items like in-game purchases, advertising, and add-on content, which doubled from year-ago levels and now makes up close to 80% of total revenue. Take-Two cited the 2022 and 2023 installments of the NBA 2K series along with perennial favorites like Grand Theft Auto and Red Dead Redemption as major contributors to sales.
However, CEO Strauss Zelnick noted that the environment for the video game industry has challenges that Take-Two hasn't fully expected. As a result, the company cut its guidance on net bookings for the full 2023 fiscal year. Moreover, as Take-Two's profit in the year-ago quarter reversed to a loss, the video game developer has started a cost reduction program that it hopes will help it save $50 million every year. That, combined with synergy benefits from its acquisition of Zynga, should help Take-Two get back on track and deal with economic uncertainty.
Trends in video gaming haven't been favorable lately, but Take-Two is holding up better than some expected. That bodes well for the game maker's prospects in the coming year and beyond.
