Skyworks to Report Q2 Earnings: What's in Store for the Stock?

Core Viewpoint - Skyworks Solutions (SWKS) is expected to report a decline in earnings and revenues for the second quarter of fiscal 2025, with earnings projected at $1.20 per share, reflecting a 22.58% decrease year-over-year, and revenues anticipated between $935 million and $965 million, indicating a 9.06% decline from the previous year [1][2]. Group 1: Earnings and Revenue Expectations - The Zacks Consensus Estimate for earnings remains steady at $1.20 per share, with a projected revenue of $951.26 million for the second quarter of fiscal 2025 [1][2]. - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 1.46% [2]. Group 2: Factors Influencing Performance - The performance in Q2 is likely to benefit from a diversified portfolio and growth in edge IoT and automotive sectors, with 5G content in new smartphones contributing positively to revenues [3][5]. - There is expected to be strong demand for edge IoT technologies, including Wi-Fi 6e and Wi-Fi 7 systems, leading to a multiyear upgrade cycle due to faster data transfer speeds and lower latency [4]. Group 3: Market Trends and Challenges - The rising adoption of generative AI and 5G technologies is anticipated to drive demand for high-performance RF solutions, positioning Skyworks favorably in the market [5]. - Despite some inventory challenges, long-term growth opportunities are seen in the automotive sector, driven by the increasing complexity of radio solutions in software-defined vehicles and connected cars [6]. - However, mobile revenue is expected to decline by mid-to-high teens sequentially due to historical seasonality, and weakness in industrial and infrastructure sectors is likely to impact top-line growth [7]. Group 4: Earnings ESP and Stock Outlook - Currently, Skyworks has an Earnings ESP of -0.83% and a Zacks Rank of 4 (Sell), indicating lower odds of an earnings beat [8].