Shares of Skyworks Solutions (SWKS) plunged Friday even though the chipmaker edged Wall Street’s targets for its fiscal third quarter and guided modestly higher for the current period. SWKS stock dropped by more than 6% on the news.
The Irvine, Calif.-based company said late Thursday that it earned an adjusted $2.15 a share on sales of $1.12 billion in the quarter ended July 2. Analysts expected Skyworks earnings of $2.14 a share on sales of $1.1 billion, according to FactSet. On a year-over-year basis, Skyworks earnings rose 72% while sales climbed 52%.
For the current quarter, Skyworks expects to earn $2.53 a share on sales of $1.3 billion. That’s based on the midpoint of its outlook. Wall Street had predicted Skyworks earnings of $2.47 a share on sales of $1.23 billion in the September-ended quarter, FactSet said.
“Looking ahead, we expect continued momentum as we execute on strong design wins with our mobile and broad markets customers,” Chief Executive Liam Griffin said in a news release.
On the stock market today, SWKS stock dropped 6.2% to close at 184.51. During the regular session Thursday, SWKS stock rose 2.4% to 196.67.
On July 14, SWKS stock hit a buy point of 193.74 out of a cup-with-handle base, according to IBD MarketSmith charts. But it couldn’t hold on to its gains and ended the day below the buy point. It then traded sideways until surging higher on Thursday. On Friday, it triggered a stop-loss sell rule, according to IBD trading principles.
SWKS Stock: 5G Wireless Is A Business Driver
Griffin is particularly bullish on prospects for the company’s 5G wireless chips.
“An expanding array of usage cases — from mobile to automotive, cloud computing and intelligent energy management — is accelerating the adoption of 5G across numerous end markets,” Griffin said.
He added, “Our decadeslong experience and deep customer relationships, combined with the strength and scale of our internal fabrication capabilities, position Skyworks to enable a broad set of applications and opportunities.”
Skyworks makes wireless networking chips. It produces analog semiconductors for the aerospace, automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet and wearable markets.
MaxLinear Stock Breaks Out
Other semiconductor stocks moving on earnings news Thursday included Allegro MicroSystems (ALGM), MaxLinear (MXL) and Power Integrations (POWI).
Manchester, N.H.-based Allegro early Thursday delivered better-than-expected June-quarter results and guidance. Its shares popped 7.3% to 27.12 on Thursday.
Carlsbad, Calif.-based MaxLinear late Wednesday posted a beat-and-raise report. Its earnings soared 489% year over year to 53 cents a share in the second quarter. Its sales leapt 215% to $205.4 million.
MaxLinear stock jumped 12.3% to 48.15 on Thursday. Earlier in the session, it broke out of a 22-week consolidation period at a buy point of 44.15, according to MarketSmith charts.
San Jose, Calif.-based Power Integrations late Thursday easily beat Wall Street’s targets for the second quarter. It earned an adjusted 83 cents a share on sales of $180.1 million. On a year-over-year basis, earnings increased 152% while sales climbed 69%.
POWI stock was jumped 14.1% to close at 96.99 on Friday.
SWKS Stock Ranks No. 12
SWKS stock ranks No. 12 out of 36 stocks in IBD’s semiconductor manufacturing industry group. Skyworks has an IBD Composite Rating of 87 out of 99, according to IBD Stock Checkup. The Composite Rating scores a stock’s key growth metrics against all other stocks regardless of industry group.
Power Integrations ranks 10th in the semiconductor manufacturing industry group. Allegro is the No. 16 company in the group.
Meanwhile, MaxLinear ranks eighth out of 30 stocks in IBD’s fabless chipmaker industry group.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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