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Apple ’s ( AAPL ) “iPhone drag” tugged Skyworks Solutions ’ ( SWKS ) fiscal Q3 guidance by $50 million late Thursday, prompting shares of radio-frequency chip rivals Broadcom ( AVGO ) and Qorvo ( QRVO ) to topple early Friday. Skyworks stock led a broad Apple chip sphere fall, down 4.5%, near 68, in morning trading on the stock market today . Shares of competitors Broadcom and Qorvo were down a respective 2% and 2.5%. NXP Semiconductors ( NXPI ), Qualcomm ( QCOM ) and InvenSense ( INVN ) stocks followed, down 1%, 3% and 4%, respectively. Apple stock was down 2%. For its fiscal Q2, which ended April 1, Skyworks reported $775.1 million in sales and $1.25 earnings per share minus items, in line and topping the consensus of 25 analysts polled by Thomson Reuters for $775.6 million and $1.24. But EPS slipped to single-digit growth for the first time in 13 quarters, rising 9% year over year. Sales rose 2%, in the single-digit range for the first time in 14 quarters. Both metrics have decelerated for five consecutive quarters. Current-quarter guidance for $750 million in sales and $1.21 EPS ex items would be down 7% and 10%, respectively, vs. the year-earlier quarter. On a year-over-year basis, sales have never declined in the past five years. EPS has declined twice, but this quarter’s decline would be the biggest. And both metrics lagged the consensus for $800.5 million and $1.32. Mizuho analyst Vijay Rakesh blamed the “iPhone drag” for Skyworks’ weak guidance. On Tuesday, Apple reported its first year-over-year decline in iPhone sales and its first quarterly revenue drop in 13 years. Apple CEO Tim Cook said Tuesday that the company planned to cut channel inventories in the June quarter “in light of the macroeconomic environment.” Late Tuesday, supplier Cirrus Logic ( CRUS ) offered Q3 guidance that also missed Wall Street views. But Skyworks expects a strong September quarter, with 20% and 40% content gains at Samsung and Huawei. On average, Chinese smartphones are growing content by 20% year over year, Rakesh wrote in a research report. Rakesh cut his price target on Skyworks stock to 99 from 105 but reiterated a buy rating. Cowen analyst Timothy Arcuri estimates that 40 million to 50 million iPhones will be sold in the June quarter, leading to better upside in Skyworks’ fiscal Q4. But he adds that Qorvo might be a stronger RF competitor now. Both analysts suggest that Skyworks look to diversify amid the slowing Chinese and iPhone markets. Arcuri reduced his price target on Skyworks stock to 76 from 78 and kept his market perform rating. Scalper1 News
Scalper1 News