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Investing.com -- Shares of Skyworks Solutions (NASDAQ: NASDAQ:SWKS) plummeted 23% following the company’s announcement of a significant reduction in its content position in the next iPhone. The disappointing update came during a recent conference call, where management revealed an expected 20% to 25% decrease in their content position, impacting revenue from the fourth quarter of fiscal 2025 and throughout fiscal 2026. The company acknowledged securing multiple sockets, including several highly integrated RF modules, but will now be dual-sourced on a key socket rather than being the sole provider.
Despite this setback, Skyworks Solutions reported first-quarter earnings per share (EPS) of $1.60, marginally beating the analyst estimate of $1.57. Revenue for the quarter aligned with consensus estimates at $1.07 billion. Looking ahead, the company anticipates Q2 2025 EPS of $1.20, just above the consensus of $1.19, with revenue projections between $0.94-0.97 billion, which is in line with consensus estimates of $0.94 billion.
In a separate development, Skyworks Solutions announced the appointment of Philip Brace as president and chief executive officer, effective February 17, 2025. Brace will also join the board of directors, succeeding Liam K. Griffin, who is stepping down but will remain in an advisory capacity to facilitate a smooth transition over the following three months.
The market’s reaction to the news reflects concerns over Skyworks’ future revenue streams, as the reduced role in the forthcoming iPhone represents a significant loss for the semiconductor company. The iPhone has been a key revenue driver for Skyworks, and being dual-sourced on a major component suggests increased competition and potential margin pressures.
Investors are now weighing the immediate positive earnings report against the longer-term implications of the company’s reduced involvement in the next iPhone generation. The management’s candid communication about the challenges ahead indicates a transparency that may be appreciated by investors, but the stock’s movement clearly shows the weight the market places on the company’s relationship with its largest customer.
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