Skyworks Expects Strong Quarter

SAN FRANCISCO -- Skyworks Solutions(SWKS Quote - Cramer on SWKS - Stock Picks) said better-than-expected demand for its cell phone chips will strengthen its financial results for the recently ended quarter.

The Woburn, Mass.-based company said Thursday that revenue and earnings for its fiscal first quarter, to be reported next week, will be at the high-end of its initial projections.

The pre-announcement sent Skyworks shares up 4%, or 32 cents, to $8.01 in midday trading Thursday.

Skyworks attributed its financial upside to "better-than-expected traction with the company's diversified Linear Products portfolio and multimode content growth within the mobile handset."

While fears of an imminent recession and a slowdown in consumer spending on electronics have pounded chip stocks of late, Skyworks is the latest firm to hint that cell phone sales are holding up.

In December, Texas Instruments(TXN Quote - Cramer on TXN - Stock Picks) and National Semiconductor(NSM Quote - Cramer on NSM - Stock Picks) both reported strong demand for cell phone chips.

TI said at the time that orders for chips used in both high-end cell phones as well as low-priced models had not slackened in December.

And the demand that Skyworks is now reporting in multimode chips -- which allow cell phones to operate on multiple radio frequencies and across various standards like WCDMA and EDGE -- suggest advanced cell phones sold well during the holiday season.

Skyworks said in November that it anticipated revenue growth "approaching 10%" in the fiscal first quarter, compared to the fourth quarter's $190.5 million, with EPS, excluding stock option compensation expenses, between 15 cents and 17 cents.

The average analyst expectation calls for Skyworks to earn 16 cents a share on revenue of $207.9 million.