Skyworks' operating income rises, revenues fall
The company s pro forma operating income was $4.0 million, up slightly compared to $3.7 million in the previous quarter. In the year-ago period, Skyworks made a loss of $22.7 million. March 2003 quarter fiscal 2003 pro forma loss per share was $0.01 and in-line with consensus estimates.
Operating loss in accordance with GAAP for the second fiscal quarter was $0.9 million, which includes amortization of intangible assets and costs to implement consolidations. GAAP loss per share was $0.04.
"Despite the seasonally weak March quarter, Skyworks was able to maintain revenues in our wireless business," said David Aldrich, Skyworks president and CEO. "This was driven by the ramp of new design wins, particularly within our direct conversion transceiver and cellular systems product areas, resulting in capture of an increasing amount of semiconductor content within the handset."
At the same time, said Aldrich, Skyworks leveraged its module manufacturing capability and low cost structure to achieve gross margin of 44% in its wireless business and 40% on an aggregate basis, yielding a higher level of operating profitability.
During the quarter, Skyworks completed all facility consolidations and shifted GaAs HBT production from the former NDI/Alpha fab in Sunnyvale, CA to Newbury Park, CA, and manufacturing from Haverhill, MA to Mexicali, Mexico. Cycle times at Mexicali were reduced to less than five days, while Skyworks maintained module manufacturing yields of greater than 95%.
Looking ahead, Skyworks expects June quarterly revenues within its wireless business to be flat to down five percent sequentially, despite a strong design win momentum. This is due to the current economic environment, coupled with reported wireless softness in China, Korea and India.
"In parallel, per our supply agreement with Conexant and based on their outsourcing needs, we anticipate that revenue from our assembly and test operation will be approximately $11 million, versus $13 million in the March quarter," said Paul Vincent, Skyworks CFO.
"Operationally, we expect our gross margin to be roughly 41 to 42 percent within our wireless business and 38 percent on an aggregate basis. Meanwhile, we are projecting operating expenses to decline to slightly less than $57 million as we continue to execute on our cost reduction initiatives and tap additional merger synergies. In turn, during a time of market uncertainty, we intend to maintain operating profitability," Vincent concluded.
