New smartphones like Apple’s iPhone 12 family has sent Skyworks Solutions back into long-absent year-over-year growth. The company powers other connectivity applications like 5G network infrastructure, cars, and touchless digital payments.
Wireless connectivity chip specialist Skyworks Solutions just put the wraps on its 2020 fiscal year, and it ended with a bang. Revenue increased by double-digit percentages, not just sequentially from the previous quarter during a typically busy late summer and early autumn period, but also year over year as the company starts to lap effects from the U.S.-China trade war. With lots of new 5G-enabled smartphones coming to market, I expect the company’s expansion to have some legs.
Skyworks’ revenue in fourth-quarter fiscal 2020 (three months ended Oct. 2, 2020) was $957 million, up 30% sequentially from the previous quarter and 16% year over year. Adjusted earnings per share increased 22% year over year to $1.85.
Management said demand for its connectivity chips ramped higher at the end of the period thanks to 5G demand, and momentum will carry into Q1 fiscal 2021 because of Tier-1 customers… At 29 times trailing 12-month free cash flow (basic profits measured as revenue less cash operating and capital expenses) and with $980 million in cash and equivalents and zero debt on the books, I remain bullish on this top semiconductor and 5G stock.
MacDailyNews Take: There’s only one Tier 1 customer: Apple.