Brean Capital’s Earnings Preview: SWKS, QCOM, QRVO, And HIMX

Brean Capital’s Mike Burton shed light on several top stocks in the technology sector before earnings are released. Four of the companies highlighted by Burton are Skyworks Solutions Inc. (SWKS), QUALCOMM, Inc. (QCOM), Qorvo Inc (QRVO), and Himax Technologies, Inc. (HIMX). Mike Burton has a 66% overall success  rate recommending stocks with a +20.8% average return per rating when measured over one year with no benchmark.

Mike Burton

Skyworks will be reporting third quarter results tomorrow, July 23, after market close. Burton is expecting the company to post “in-line” results, though his estimates are slightly lower than those of the Street. Burton forecasts earnings per share of $1.28 on $800 million in revenue compared to the Street’s forecast of $1.29 EPS on $802 million in revenue. In the same quarter of last year, Skyworks posted EPS of $0.58 and revenue of $587 million.

Burton believes Skyworks benefitted this quarter from “additional content… gained at Samsung (the GS6 included the SkyOne Ultra front-end module as well as the Diversity Receive module).” However, the analyst is quick to note that Skyworks was also negatively impacted by “unit weakness.” Burton adds, “MediaTek,” a semiconductor company that works with Skyworks, “was flattish but saw a mix-up towards 4G, and China performed in-line with Company expectations.”

Looking forward, Burton expects September guidance to be “slightly higher than Consensus estimates on the back of content increases across its customers.” He continues, “SWKS is seeing content gains across its diversified customer base, but the amount of the guidance upside will ultimately come down to the additional dollar content SWKS is seeing from Apple.”

Mike Burton currently has a Buy rating on Skyworks Solutions with a $110 price target.

Qualcomm will be posting earnings today, July 22, after market close. Burton expects the company to post $5.867 billion in revenue and earnings per share of $0.96. Both estimates are in-line with those of the Street. In the same quarter of last year, Qualcomm posted revenue of $6.81 billion and earnings per share of $1.31.

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