Skyworks Exceeds Expectations, Evolves Away From iPhone-Dependence

Skyworks Solutions Inc SWKS reported second-quarter beats on both the top and bottom lines Thursday after the close. The semiconductor company, which boasts clients like Apple Inc. AAPL and Samsung Electronics SSNLF also guided Q3 results above consensus estimates.

Analyst Opinion

Tigress Financial's Ivan Feinseth, a noted Skyworks bull, spoke to Benzinga about the company's financial over-achievement.

"I thought it was a great quarter, certainly financially they exceeded expectations." Most notably, Feinseth highlighted the company is finally evolving away from investor concerns that the company is too dependent on its relationship with Apple.

For some time now, Skyworks has seen the fate of its share price tied to rumors regarding the prospects of Apple's iPhone sales. But Feinseth noted the company's opportunities have now widened considerably.

"They have the chipset for the new Samsung Galaxy S8, which is going to be a blockbuster phone. It's already selling and being received well. They're evolving into the Internet-of-things, connected cars, virtual assistants, wearables. There's just a big market ahead of them."

And the smartphone market is still ripe with potential as well. The upcoming iPhone 8 and Samsung's Note 8 will enter production, and investors may expect an acceleration in growth the second half of this year.

Staying Positive

Skyworks remains a top pick for Tigress, and it is also found on the firm's focus list.

Feinseth isn't offput by the market's reaction to the stock. Whether investors are concerned about Skyworks slightly lower gross margins, or weakness in Chinese low-end smartphone sales, the stock is down 3.44 percent early Friday.

"I don't really care about gross margins. We look at economic profit, that's the most important margin," Feinseth said. He called the low-end phone market in China a matter of natural progression and reiterated the opportunity for Skyworks as the next wave of feature-rich devices arrives.

At last check, shares of Skyworks were down 3.8 percent at $100.24.