Chipmaker Skyworks forecasts upbeat quarter; shares up 12 pecrent
(Reuters) - Chipmaker Skyworks Solutions Inc's second-quarter results and current-quarter forecast beat Wall Street estimates, helped by strong sales of chips used to connect machines to the Internet.
Shares of the company, whose radio frequency analog chips connect electronic devices to a network, rose 12 percent in extended trading on Tuesday.
Machine-to-machine connectivity, more commonly known as the "Internet of Things", allows machines on both wired and wireless networks to interact, with its uses ranging from detecting oil drill sites to medical personnel tracking patients' health.
Skyworks, whose chips connect smartphones and tablets to a telecom network, expects revenue from Samsung Electronics Co Ltd to rise this year, driven by the use of its chips in the South Korean company's wide range of smartphones, including the successful Galaxy S5.
"As we look beyond 2014 we are starting to now engage early with the Galaxy S6," Executive Vice President Liam Griffin said on a conference call.
Besides Samsung, Skyworks also supplies chips to Apple Inc's largest contract manufacturer, Foxconn Technology Group.
Skyworks is not only benefiting from higher orders from handset makers but also from the growth of internet connected devices, or the "Internet of Things", RBC Capital Markets analyst Doug Freedman said.
Among other devices, the company's chips are used in Volkswagen AG's luxury division Audi's HomeLink programmable car system, allowing users to open and close garage door from their car.
Skyworks is "set to substantially outpace the broader semiconductor industry as we capitalize on increasing analog system complexity driven by the Internet of Things," Skyworks CEO David Aldrich said in a statement.
The company, whose chips are also used in e-book readers and LED lighting, forecast current-quarter adjusted earnings of 73 cents per share on a 23 percent rise in revenue to $535 million.
Analysts on average were expecting earnings of 63 cents per share on revenue of $488.2 million, according to Thomson Reuters
The company's net income rose to $76.9 million, or 40 cents per share, in the second quarter ended March 28, from $61.7 million, or 32 cents per share, a year earlier.
Excluding one-time items, profit was 62 cents per share, above the average analyst estimate of 59 cents.
Revenue rose 13 percent to $481.0 million, also beating analysts' average estimate of $470.2 million.
Skyworks shares were up 12 percent at $41.38 in trading after the bell. They closed at $37.02 in regular trading on the Nasdaq.
(Reporting By Aurindom Mukherjee in Bangalore; Editing by Savio D'Souza)
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