Skyworks Expands Smartphone Content - Analyst Blog
August 22 2012 - 12:00PM
Zacks
Skyworks Solutions, Inc. (SWKS) has added more
content in its smartphone platforms based on its industry-leading
light emitting diode (LED) camera flash driver solutions.
There is a growing need for high
quality photographs among smartphone users, which in turn is
driving implementation of camera flash drivers in mobile devices.
These driver solutions from Skyworks enable longer battery life for
consumers along with a simplified design, reduced component count
and decreased overall solution size for Original Equipment
Manufacturers (OEMs).
According to research, mobile
phone cameras will grow to approximately 2.2 billion units by
2015 from 1.6 billion units in 2011.
Meanwhile, the colossal demand
for smartphones continues to drive momentum for Skyworks,
particularly at Nokia Corporation and Apple. Skyworks has
partnerships with leading smartphone vendors, such as RIMM,
Motorola and Samsung. With a diversified customer base, Skyworks is
strongly placed in this market.
Apart from smartphones, growth
will be propelled by high resolution tablets, USB modems, home
networks and yet-to-be-introduced Internet connective devices. The
rising RF dollar content and increasing complexity associated with
the proliferation of smartphones is fueling growth in the total
available market (TAM), providing a unique expansion opportunity
for Skyworks.
Management expects smartphone
adoption to increase in the developing countries, such as China and
India.
Earlier, Skyworks posted a net
income of $49.3 million or 26 cents per diluted share in the third
quarter of fiscal 2012, down from net income of $51.5 million or 27
cents per diluted share in the year-ago.
Excluding acquisition-related
charges but including stock-based compensation expense, Skyworks
reported net income of 35 cents per share, in line with the Zacks
Consensus Estimate.
However, earnings estimates have
been more or less static after the company reported third quarter
results. Hence, we maintain a Neutral recommendation on Skyworks.
Our recommendation is supported by a Zacks #3 Rank, which
translates into a short-term rating of Hold.
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