Skyworks shares drop 11%, Q4 profit below estimates

Skyworks Solutions (SWKS) said on Nov. 3 that its fiscal fourth-quarter non-GAAP diluted earnings were $1.28 per share, below the $1.30 consensus estimate. Revenue of $1.05 billion was also below the $1.06 billion estimate.

Shares fell 10.6% in regular trading as of 9:35 a.m. ET on Nov. 4, to $76.35, from a regular-session close of $85.40.

The quarter ended Oct. 2. The combination with Qorvo closed after the quarter ended, so the reported results cover Skyworks alone, the company said.

Combined September-quarter revenue was approximately $1.98 billion, which includes an additional week in Qorvo's fiscal quarter, the company said in a statement.

Here's how the company did:

• Revenue: $1.05 billion vs. $1.10 billion a year earlier, $1.06 billion expected
• Non-GAAP diluted EPS: $1.28 vs. $1.76 a year earlier, $1.30 expected
• GAAP diluted EPS: 15 cents vs. 94 cents a year earlier
• Non-GAAP operating margin: 21.7% vs. 24.0% a year earlier

Revenue fell in each of the last three quarters, from $1.10 billion in the fourth quarter of fiscal 2025 to $934.8 million in the third quarter of fiscal 2026, according to its SEC filings.

Net income fell in each of the last three quarters, from $141.4 million to $33.9 million over the same span, according to its SEC filings.

Phil Brace, chief executive officer and president of Skyworks, said: “Our focus now is execution: delivering for our customers, achieving $500 million or more of annual cost synergies and building a stronger, more diversified Skyworks.”

For the full fiscal year, revenue was $3.96 billion, against $4.09 billion a year earlier. Non-GAAP diluted EPS was $5.05, against $5.93.

2027 first-quarter outlook

For the December quarter, the company expects revenue of $1.80 billion to $1.90 billion, its first as a combined company.

The midpoint includes about $1.07 billion from legacy Skyworks and about $780 million from legacy Qorvo. The company said this is the last quarter in which it will give that split.

At the midpoint of the revenue range, the company expects non-GAAP diluted earnings per share of $1.25, based on about 241 million diluted shares.

That outlook includes about $50 million of other expense, primarily interest on the acquisition financing.

Smartphone revenue is expected to decline in the low teens percent sequentially. Diversified Growth Markets revenue is expected to grow in the low single digits sequentially, and in the high single to low double digits year over year on a combined basis.

Synergy plan

The company expects about $150 million of operating expense synergies in fiscal 2027, weighted to the second half. It expects an annualized run-rate of $250 million to $300 million by the end of the fiscal year.

The company remains committed to $500 million or more of annual cost synergies within 24 to 36 months of close.

Charges and cash flow

Restructuring, impairment and other charges were $82.1 million in the quarter, against $1.6 million a year earlier.

Net cash provided by operating activities was $33.7 million in the quarter. Non-GAAP free cash flow was a $61.0 million outflow, after capital expenditures of $94.7 million.

Debt stood at $2.47 billion at the end of the quarter, up from $995.8 million a year earlier. The company received $1.98 billion of proceeds from long-term debt issuance in the quarter.