Yesterday after the close of trading Skyworks Solutions (SWKS) , one of the companies in the Apple (AAPL) supply chain reported numbers that were mostly in line and also provided guidance that was mostly in line as well.
The company reported June quarter earnings of $1.24 per share on revenues of $752 million vs. Wall Street expectations of $1.21 per share and $750 million.
For the current quarter (fiscal Q4 for the company), Skyworks guided revenues to between a range of $827 million and $834 million, compared with Wall Street estimates of $830 million. For earnings, management said that they would come in at $1.43 per share vs. expectations of $1.41 per share.
In addition, the company also raised its dividend by 2 cents per share to $0.28 and also added $400 million to its share buyback program.
So, why are shares down about $3.50 per share, or 5%, in premarket trading, despite the fact that in this time of slow global growth and Apple's well-publicized issues, Skyworks was at least able to maintain guidance for the current quarter, buyback and dividend notwithstanding?
Just a quick aside, shares were actually down more than $5 per share in last night's post-market trade just after the company's results were released.
The reasons could be twofold.
One is the fact that in just the last 11 trading days, shares of Skyworks have gone from a low of $57 and small change per share on July 6 to almost $71 per share at yesterday's close. That is a return of almost 25% in the last 11 trading days. Not shabby, huh? Given that fact, some sell-the-news type of reaction could be warranted, although shares of SWKS are still cheap even at $71 (yesterday's closing price) according to my fair value calculations.
Second is the fact that Skyworks is almost tied to the hip with Apple and as Apple goes, so does Skyworks. At the moment, Apple is in the doldrums according to some and just plodding along according to others. So, this pullback should come as no surprise to investors of Skyworks Solutions.
Having said that, the bigger question is whether Skyworks manages to bring down the entire Apple supply chain and the rest of the semis as well, despite delivering on numbers and guiding in line during current global difficulties.