What happened

Shares of Skyworks Solutions (SWKS -1.55%) found a strong signal on Tuesday. After posting a solid earnings report, the designer of wireless communication chips saw stock prices rise 12.9% just before the closing bell.

So what

In the first quarter of fiscal year 2023, which ended on Dec. 30, Skyworks saw revenues slide 12% lower year over year, but $1.33 billion was still right in line with Wall Street's consensus expectations.

On the bottom line, adjusted earnings fell 18% to $2.59 per diluted share. Here, your average analyst was looking for $2.61 per share. It's technically a miss, but by a margin of just 0.8%. In my book, then, Skyworks' entire report was just what the Street had expected.

However, that's not the whole story. Many analysts raised their price targets on the stock because they had feared a deeper disappointment. In the grand scheme of things, these modest results serve as evidence that the multiyear weakness in Android (made by Alphabet's Google) smartphone sales may have bottomed out. In other words, Skyworks and other leading Android component suppliers should see better days ahead.

Furthermore, Skyworks took this opportunity to introduce a new stock buyback program with a $2 billion authorization. This plan replaces the $750 million that was left of an existing $2 billion program, launched two years ago.

Now what

On the earnings call, Skyworks CEO Liam Griffin highlighted Wi-Fi 6 solutions going mainstream, while his company is launching next-generation Wi-Fi 7 systems. Skyworks is also a serious player in potentially hot sectors such as automotive computing, clock chips for 5G wireless network deployments, and industrial networking.

So times may be tough in the middle of an inflation-based economic crisis, but order volumes should spring back to life soon enough.

"Wireless connections continue to proliferate, with mobile network traffic doubling over the past two years," Griffin said. "We've got great [inventory] that's ready to go and design wins that have been cemented, and those will roll out in the second half of the year, for sure."

This message echoes an attitude seen many times this earnings season: Investors should buckle down for potholes and bumps over the next few months, but the second half of the calendar year should offer a smoother ride.