I would also like to remind everyone that the results and guidance we will discuss today are from our non-GAAP income statement. It is consistent with the format we have used in the past. Please refer to our press release within the investor relations section of our company website for our complete reconciliation with GAAP.With that I will now turn the call over to Dave with his comments on the quarter. David Aldrich Thank you, Tom, and welcome everyone. I’m pleased to report today that Skyworks exceeded F3Q guidance for revenue, the gross and operating margin, as well as earnings per share. This is driven by our momentum in mobile internet and continued penetration into new vertical markets and a broad set of diversified analog applications. Specifically for the quarter, we delivered revenue of $275 million. This is up 44% year-over-year and up 16% sequentially. We expanded our gross margin to 43.3%, and our operating margin to 23.1%. In turn we grew operating income 122% year-over-year to $64 million, and we posted $0.32 to EPS – now this is $0.02 better than our guidance. With respect to the balance sheet, we retired another $20 million of March 2010 convertible debt, and we exited the quarter with $390 million of cash. As our results reflect we continue to make progress along our strategic objectives, and these are mainly first, diversifying across both end markets and customers; second, continuously improving our operational execution and in turn delivering leverage and higher financial returns. Now I’ll go through each briefly. First, on the diversification front we are adding new customers and we’re entering new vertical markets. When we talk about vertical markets we’re really referring to underserved, high margin segments where we can provide a custom analog solution that leverages our broad technology footprint to improve our customer’s overall system performance.
And in addition to entering new markets, we’re expanding our customer base. Not that long ago, you may recall, our revenue was heavily concentrated with a few tier-one handset OEMs, and today not only do we support the industry-leading handset manufacturers and smartphone providers, we’re also delivering highly-integrated solutions to key energy management suppliers such as Itron, Silver Spring Networks, Sensus, Landis + GR, while addressing new markets and vertical applications.I’d like to give just a few examples of our diversifications, especially during the quarter. Some examples are we’ve ramped DBS solutions in support of DirecTV and the Dish Network. We commenced shipments of attenuators for Cisco’s multi-room DVR for use in Verizon’s FIOS applications. We captured key design wins with broadband control ICs and some leading netbook and network OEMs. We supported Garmin’s GPS business and Europe’s largest supplier of electric toll tag systems with next generation analog components. And finally we powered Samsung’s 4G USB motor. This is the world’s first commercialized LTE device. These are just among a few concrete examples of our diversification strategies and practice. Okay, now with respect to operational execution, we improved end-to-end manufacturing yields during the quarter, we continued to drive to reduce our development cycle times while increasing inventory turns, and in addition we continue to seek operations to leverage our scale advantage and our hybrid outsourcing model. And finally, as our improving fundamentals reflect, we’ve made substantial progress towards our established financial targets. Last quarter we delivered a 280 basis point year-over-year expansion in gross margin, and an 820 basis point in our operating margin. And we have specific action plans in place to deliver further improvements. Okay, now that we’ve hopefully put our strategy into context, let me elaborate on what’s fueling Skyworks’ top line growth, and how we positioned ourselves to outpace our addressable markets.
Today we’re capitalizing on three distinct business segments – mobile internet, vertical markets, and analog components. So first, with regard to the mobile internet, we believe the smartphone segment is poised to grow at 3x to 4x the 8% to 10% growth rate anticipated for the overall cellular handset market. For Skyworks, this market is growing at an even faster pace, given our increasingly customized solutions and our very strong relationships with leading OEMs along with the rising tide of analog content, as carriers and consumers shift to band-intensive 3G and 4G platforms. And we’re very fortunate today to be shipping to virtually all cellular OEMs and smartphone providers.Read the rest of this transcript for free on seekingalpha.com