Skyworks earnings-linked selloff extends as analysts cut ratings

Investing.com -- Shares of Apple (NASDAQ:AAPL) supplier Skyworks Solutions (NASDAQ:SWKS) extended their declines after the company’s disappointing earnings report prompted downgrades from two Wall Street firms.

The California-based chipmaker projected a decline in revenue for its mobile segment and issued a profit forecast that fell short of analysts’ expectations. Furthermore, it said it expects a content loss for the next-gen iPhone. 

The stock plummeted more than 28% in premarket trading Thursday. 

The slowdown in electric vehicle adoption has contributed to excess chip inventory, weighing on analog semiconductor companies like Skyworks.

"We anticipate a mid-to-high teens sequential decline in mobile, consistent with historical seasonal patterns. In broad markets, we expect additional sequential and year-over-year growth," CFO Kris Sennesael said in a statement.

For the second quarter, Skyworks expects revenue between $935 million and $965 million, which is largely in line with estimates. It projects adjusted earnings of $1.20 per share for the March quarter, missing the consensus estimate of $1.22 per share.

For the fiscal first quarter, which ended December 27, the company reported revenue of $1.07 billion, matching expectations. Adjusted earnings came in at $1.60 per share, slightly ahead of analysts' projections of $1.57 per share, according to LSEG data.

Moreover, Skyworks management said it projects a 20-25% reduction in content for the next-generation iPhone 17.

"We are downgrading SWKS to Hold as the company has lost additional content at its larges customer, Apple, given a move to a dual-sourced socket strategy for a complex device that had previously been sole-sourced to SWKS," Stifel analysts said in a post-earnings note. 

"While we believe that SWKS had viewed the iPhone 17 as a transition cycle to iPhone 18, content recovery is not a likely event until Apple shifts to larger mix of internally sourced modems, in our view. In the meantime, revenue and profitability prospects are now significantly lower relative to our previous assumptions through F2026."

Mizuho (NYSE:MFG) analysts also cut their rating on SWKS stock to Neutral from Outperform, forecasting "continued headwinds through at least the iPhone 18 launch" and citing "limited near-term catalysts."