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

Skyworks Solutions SWKS is slated to release second-quarter fiscal 2025 results on Wednesday.

For the second quarter of fiscal 2025, the company expects non-GAAP diluted shares of $1.20 per share.

The Zacks Consensus Estimate for earnings has remained steady at $1.20 per share in the past 30 days. The projection indicates a 22.58% decline from that reported in the year-ago quarter. 

For the second quarter of fiscal 2025, the company expects revenues between $935 million and $965 million.

Skyworks Solutions, Inc. Stock Price and EPS Surprise

Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $951.26 million, indicating a 9.06% year-over-year decline.

Skyworks’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 1.46%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar).

Let’s see how things have shaped up prior to the announcement.

Factors Likely to Have Influenced Q2 Performance

SWKS’ second-quarter fiscal 2025 performance is likely to have benefited from its diversified portfolio and growth in edge IoT and automotive sectors.The company expects that 5G content in new smartphones, including the Google Pixel 8a, Samsung Galaxy M, and Oppo Reno12, is likely to have continued to contribute positively to revenues in the to-be-reported quarter, particularly in the premium segment of the market.

SWKS expects modest sequential growth in broad markets, with a return to year-over-year growth. Specifically, there is strong demand for edge IoT, including Wi-Fi 6e and Wi-Fi 7 systems, which is likely to lead to a multiyear upgrade cycle in the to-be-reported quarter due to faster data transfer speeds and lower latency.

The rising adoption of generative AI and 5G technologies is expected to have driven continued demand for high-performance RF solutions in the to-be-reported quarter. Skyworks is positioned to benefit from the growing need for fast RF connectivity and power management in AI applications, next-generation smartphones, and autonomous vehicles.

Despite some inventory challenges, Skyworks sees long-term growth opportunities in its automotive business. The increasing focus on software-defined vehicles, connected cars, and in-cabin user experiences is expected to have generated higher levels of radio complexity, creating demand for Skyworks’ advanced RF solutions in the to-be-reported quarter.

However, Mobile revenue is expected to decline in the second quarter of 2025 by mid-to-high teens sequentially due to historical seasonality. Continued weakness in industrial and infrastructure due to sluggish demand is expected to have hurt top-line growth in the to-be-reported quarter.

What Our Model Says on SWKS Stock

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the exact case here.

Skyworks has an Earnings ESP of -0.83% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Affirm AFRM has an Earnings ESP of +63.27% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Affirm shares have lost 14.1% in the year-to-date period. Affirm is set to report its third-quarter fiscal 2025 results on May 8.

StoneCo STNE has an Earnings ESP of +6.25% and a Zacks Rank of 1 at present.

StoneCo shares have surged 72.8% in the year-to-date period. STNE is set to report its first-quarter 2025 results on May. 8.

Baidu BIDU has an Earnings ESP of +8.67% and a Zacks Rank of 2 at present.

Baidu shares have gained 6.7% in the year-to-date period. BIDU is set to report its first-quarter 2025 results on May 21.

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This article originally published on Zacks Investment Research (zacks.com).

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