NEW YORK (TheStreet) -- Skyworks Solutions(SWKS) - Get Report stock is down by 6.69% to $68.39 in afternoon trading on Wednesday as yesterday's reports that Apple (AAPL) will cut production of its latest iPhone weigh on shares of Apple suppliers.
The iPhone maker expects to lower its iPhone 6 and iPhone 6s production by up to 30% in the March quarter, Japan's Nikkei Asian Reviewreported.
Based in Woburn, MA, Skyworks is an Apple supplier than produces analog semiconductors.
For every 10 million-unit reduction of iPhone sales, Skyworks and rival Qorvo (QRVO) will take a hit of 40 cents per share on earnings, according to Citigroup, Barron's reports.
The firm consequently reduced its 2016 and 2017 profit expectations to reflect "recent iPhone supply chain production cuts."
Skyworks shares "remain volatile" and probably won't bottom before April, Citigroup notes, according to Barron's.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate SKYWORKS SOLUTIONS INC as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 22.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SWKS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.41, which clearly demonstrates the ability to cover short-term cash needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SKYWORKS SOLUTIONS INC has improved earnings per share by 31.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SKYWORKS SOLUTIONS INC increased its bottom line by earning $4.10 versus $2.37 in the prior year. This year, the market expects an improvement in earnings ($6.26 versus $4.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 31.0% when compared to the same quarter one year prior, rising from $174.90 million to $229.20 million.
- You can view the full analysis from the report here: SWKS