industry stocks
steadily ever since (see Figure 2). Two strong quarters have helped that recovery. For the first fiscal quarter 2012, which finished on December 30, 2011, the company reported sales of $393.7 million, up 17 percent year-over-year, plus a profit of $96.2 million. Results for the following quarter, which is traditionally weaker, were equally impressive: Sales of $364.7 million, up 12 percent year-over-year, and a profit of $79.8 million. In addition, during those three months the company has paid off the lasts of its debts.
One of the big, recent changes at Skyworks that has helped the company to grow its revenue is diversification, both in terms of products and addressable markets.
Part of this move has involved the $200 million cash acquisition of Advanced Analogic Technologies, which will allow Skyworks to compete in the $2 billion market for power managements ICs used in displays.
“We are clearly not just a PA company [anymore], but rather a full-service RF and analogue specialist focused on mobile Internet and adjacent high-growth market opportunities,” explained David Aldrich, Skyworks’ president and CEO in a conference call discussing second quarter 2012 results.
Aldrich went on to give an example of the expanded deployment of Skyworks components in handsets. According to a teardown published by Chipworks, the Galaxy Note from Samsung contains an RF engine produced by Skyworks, plus the company’s antenna switch module, band switches, GPS low noise amplifier and a wireless networking front-end module.
In cases like this, where Skyworks provides a rafter of products into a single design, its total sales per handset can be $10 or more. And this trend of increasing the dollar-content-per-phone looks set to continue, due to a rise in the number of frequency bands built into smartphones – one design that Skyworks has seen sports a staggering 23 bands.
Sales of smartphones continue to rise, and shipments could hit 4 billion units between 2011 and 2015. This will help to swell Skyworks’ revenue, which should also grow as the firm ships more and more wireless radios into an incredibly wide variety of non-mobile segments that extend beyond just gaming, PCs, TVs and set-top boxes. Earlier this year, the company announced design wins in the entire line-up of General Electric smart appliances, including washers, dryers, refrigerators, dishwashers and ovens. In addition, products from Skyworks are featuring in a remote heart monitoring device from Medtronic, radio applications for emergency responders and Ericsson basestations.
All this activity will help to increase Skyworks’ sales, which are expected to hit $383 million in the third quarter 2012. Alongside this revenue growth, the company expects improvements in gross margins that should spur the next quarter’s profit to about $84 million.
Diversified tools sales Third on the leader board is French manufacturer of deposition equipment, Riber, which has seen the value of its shares drop by 18.5 percent in the 12 months leading up to 30 April 2012. Over this period there have been no wild swings in share price that has been a little higher in 2012 than it was in the latter half of 2011.
Figure 1. Infinera’s share price has been steady over the last 12 months
Figure 2. Skyworks share price has
been a tale of two halves: heading south in the latter part of 2011, but climbing back up during the start of this year
Figure 3. Oclaro has had a bad 12 months on the stock market.Will the merger with Opnext turn the situation around?
June 2012
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