If you can enjoy viewings of Gigli and Showgirls, you also have the key to appreciating the first-quarter report from Skyworks Solutions
Low expectations, of course.
Just as no movie fan expects great art from some of the worst films known to man, most investors set a very low bar for Skyworks to clear this time. The radio chip designer turned the corner into 2012 with some of the worst shareholder returns in last year's semiconductor market. Alongside longtime rival TriQuint Semiconductor
So when the company just edged out analyst targets last week, shares immediately jumped more than 11%. Even so, share prices fell 27% year-over-year and 21% over the last six months. This was an impressive little bounce, but Skyworks is still far away from reliving its glory days.
Just slightly ahead of management guidance were $394 million of sales boiling down to non-GAAP earnings of $0.51 per share. A meaningful part of the outperformance came from share buybacks; if Skyworks had stuck to its predicted share count of 191 million, the company would have just met Street expectations rather than beating them.
When pressured on the threat from Avago's multifunction signal amplifiers and filters, management came off sounding very defensive. "Remember, we're the best in the PA (Power Amplifier) space," said CEO Dave Aldrich. "We're the biggest in PA space. I think we're the best, we're the biggest by far." And those pesky integrated filters are surely a niche market, while Skyworks' broader solutions probably play to a larger market, in management's view, at least.
Sounds to me like someone needs to take the blinders off. Aldrich should go rent Gigli and use the experience to learn something about how to handle a bad experience. If the company wants to stay relevant in the vibrant mobile market of 2012, it had better learn a few new tricks.
Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of TriQuint Semiconductor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.