Riding the continuing strength of wireless adoption, Skyworks reported enviable third fiscal quarter financial results. Revenue was $900.8 million, 20 percent above the prior year’s quarter and 6 percent above the prior quarter. Revenue comfortably exceeded the guidance of $890 million.

Skyworks revenue trend.
Skyworks revenue trend.

Profitability was equally strong, with GAAP gross margin of 50.4 percent and operating margin of 33.8 percent. Non-GAAP gross and operating margins were 50.6 and 37 percent, respectively. Diluted earnings per share (EPS) was $1.32 (GAAP), 36 percent above the prior year’s quarter, and $1.57 (non-GAAP), a 27 percent increase. The non-GAAP EPS was $0.05 better than consensus estimates.

Skyworks generated $314 million in cash from operations in Q3 and ended the quarter with $1.4 billion in cash and equivalents with no debt. Reflecting the strong results, Skyworks will distribute a cash dividend of $0.32 per share, a 14 percent increase from the prior quarter’s dividend.

Looking to Q4, the company expects revenue to reach $980 million, 17 percent above the prior year’s quarter, with non-GAAP diluted EPS of $1.75.

Liam Griffin, president and CEO, said Skyworks’ vision is “connecting everyone and everything all the time.” He indicated that the company’s growth is being fueled by demand in mobile and the segment he calls “broad markets.”

In mobile, Skyworks is playing with “all premier” smartphone players, i.e., Huawei, OPPO, Vivo, ZTE and Sharp in addition to market leaders Apple and Samsung. The company is achieving dollar content gains in the phone, which Griffin sees continuing with the adoption of carrier aggregation in top-tier phones and the evolution of capabilities in mid-tier phones.

The broad markets segment encompasses non-handset opportunities, including cellular infrastructure, automotive, security, healthcare and smart home systems that use the cellular, Wi-Fi, Bluetooth and Zigbee standards. In Q3, broad markets contributed approximately 27 percent of the revenue and, according to Griffin, will reach a $250 million per quarter run rate in fiscal Q4.