NEW YORK ( TheStreet) -- "When you're dealing with earnings, it's all about the expectations," Jim Cramer told the viewers of his "Mad Money" TV show Thursday, as he outlined the pecking order for how some high flying tech stocks fared after they reported their quarterly results, and what to expect in the future. At the top of the heap was Apple ( AAPL), a stock which Cramer owns for his charitable trust,
More Growth AheadIn the "Executive Decision" segment, Cramer sat down with David Aldrich, president and CEO of Skyworks Solutions ( SWKS), a smartphone component maker that's up 600% since Cramer first got behind the stock on Dec. 12, 2008. Aldrich said the market is still in the early stages of major upgrade cycles, with smartphones only accounting for 20% of all phones sold, but predicted to reach 50% by 2014, and tablets, a category that didn't exist a year ago, now growing between 70% and 80%. Skyworks currently does business with all of the cell phone manufacturers, said Aldrich, with the company's chips excelling in 3G, 4G and wifi connectivity for just about every mobile device imaginable. He said Skyworks components use less power, are more reliable and best of all, come in the smallest of form factors. When asked about the company's quarterly results, which were strong during a period that's historically been weak for the company, Aldrich said that the growth of smartphones and tablets has far exceeded the traditional seasonality of older 2G feature phones. Skyworks has also been able to increase the dollar amount of its products that goes into each phone sold, which has bolstered the company's gross margins and bottom line. Finally, when asked why the market doesn't seem to realize Skyworks' strong position, Aldrich said that in the old model, cell phone component makers were seen as low cost commodities. But in the new, smartphone world, Skyworks' components are highly integrated and specialized thanks to years of research and development, which has now allowed the company to gain a lot of market share.
Refining ChallengesContinuing his "Eye on Energy" series, Cramer put the oil refiners into his "Sell Block", telling viewers they should avoid this tough business. He said stocks like Valero ( VLO) and Tesoro ( TSO) have both had big runs since September thanks to increased utilization rates, but that trend can't last forever. Cramer explained that as the price of crude rises, it becomes harder and harder for refiners to maintain their margins. As prices head still higher, demand falls as driving habits change. That leaves little growth for this beleaguered group. Cramer said the only refiner he will recommend is Sunoco ( SUN), a company which also operates 4,800 gas stations and convenience stores in the Northeast and Midwest. Cramer last recommended Sunoco on April 12, 2010 and since then shares have risen 34%, but Cramer said the growth at Sunoco is not done. Sunoco has been cutting costs and raising cash, while also selling some of its refineries which has left its two remaining refineries in Pennsylvania running in the "sweet spot" for profits at 94% of capacity. The company also has a 33% stake in Sunoco Logistic Partners and a chemical business to boot. Like so many companies in the oil patch, Cramer said Sunoco's parts are worth more than the whole, which leaves many opportunities for the company to create further value for its shareholders.