Skyworks Solutions Q4 2024 Earnings: AI Prospects & Strong Financials

Skyworks Solutions Inc. (NYSE: SWKS) shares experienced a decline in premarket trading this Wednesday following the release of their fourth-quarter earnings report on Tuesday. The tech company announced an adjusted earnings per share (EPS) of $1.55, managing to surpass the analyst consensus estimate of $1.52, showcasing a solid performance. Meanwhile, the company's quarterly revenue totaled $1.025 million, aligning closely with analyst projections. In terms of shareholder returns, Skyworks affirmed its ongoing commitment by announcing a quarterly dividend of $0.70 per share, scheduled for distribution on December 24 to shareholders recorded by the end of business on December 3.

Financially, the company reported a significant annual operating cash flow amounting to $1.825 billion, along with a free cash flow hitting $1.668 billion. Highlighting the company's robust financial health, Liam K. Griffin, Chairman and CEO, emphasized the achievement of generating over $1.6 billion in free cash flow for the second consecutive year, marking a record 40% in free cash flow margin by the close of fiscal 2024. Providing insights into future growth prospects, Griffin expressed optimism about the role of artificial intelligence (AI) in the smartphone sector.

According to Griffin, AI is set to spark a revolutionary upgrade cycle for smartphones, which is expected to significantly boost demand for Skyworks’ complex RF (radio frequency) technologies. Looking towards the first quarter of 2025, Skyworks forecasts revenue to range between $1.05 billion and $1.08 billion, slightly under the analysts' estimate of $1.096 billion. They predict adjusted earnings per share (EPS) at around $1.57 at the midpoint of their revenue range, compared to the estimate of $1.72.

Kris Sennesael, the senior VP and CFO, anticipates a positive increase in their mobile business sector, driven largely by seasonal product launches, alongside moderate growth within broader markets despite existing excess inventory challenges in certain segments. Investors interested in Skyworks can engage with the stock via the Global X Internet of Things ETF (SNSR) and the First Trust Nasdaq Semiconductor ETF (FTXL).

As of the last update, Skyworks' shares were reported to have fallen by 6.65%, standing at $81.25 in premarket trade on Wednesday. In related news, it was also reported that Rivian is recalling over 5,000 R1 vehicles due to issues arising from a recent software update that affected exterior lighting systems. As always, it's crucial for investors to consider professional financial advice before making stock market decisions.