Skyworks Solutions (NASDAQ:SWKS) fell 2% in pre-open trading Tuesday despite third-quarter results which were described by analysts as "better than feared."
Revenue for the quarter fell 13% to $1.071 billion, in line with the consensus of $1.07 billion. Non-GAAP diluted EPS was $1.73, beating the consensus of $1.67.
"'Skyworks' resilient business model and disciplined execution enabled us to deliver record operating and free cash flow for the first three quarters of the fiscal year,” said CEO Liam K. Griffin. “Our targeted investments in next-generation technologies are generating solid momentum going into the second half of calendar year 2023.”
Looking toward the fourth quarter, the company sees non-GAAP EPS of $2.10 at the midpoint, versus the consensus of $2.11. They anticipate revenue of $1.19B-$1.24B, versus the consensus of $1.22B.
On the guidance, Susquehanna analysts noted that September is "all-important" as it best informs investors about upcoming iPhone content.
"While we knew this would be a lighter content year, we were worried about bigger declines. But September guidance (and December commentary) put us at ease, and close to flat content YOY," they commented.
The analysts reiterated a Positive rating and raised his price target to $130 from $125.
Several other analysts also raised their price target following the results. JPMorgan goes to $125 (from $105) while maintaining a Neutral rating, B. Riley goes to $102 (from $93) while maintaining a Neutral rating, and Morgan Stanley goes to $112 (from $104) while maintaining an Equalweight rating.
Meanwhile, Mizuho analysts, while still bullish on the stock, cut their price target to $122 (from $125) as inventory headwinds remain. The analysts' key takeaways on the quarter were: "1) SepQ stronger with iPhone launch but continued weakness in China/Android ecosystem, 2) 2H better with SepQ iPhone15 ramp (Apple (NASDAQ:AAPL) ~64% of JunQ rev), DecQ also up q/q, 3) cutting output with fab underutilization impacting GMs in Sep/DecQ, and 4) Broad Markets strength continuing in auto/industrials."
In addition to reporting earnings, Skyworks’ board of directors also raised the quarterly dividend by 10% to $0.68 per share.