Skyworks Tumbles 14% on Weak Forecast After Closing Qorvo Deal

Is the smartphone slump finally biting the chip sector? Skyworks shares fell more than 14 percent in extended trading after the company guided first-quarter revenue of 1.80 to 1.90 billion dollars, well below the roughly 1.99 billion analysts expected. Adjusted earnings per share guidance of 1.25 dollars also trailed the 1.52 consensus.

Management blamed seasonality and weak premium Android demand, expecting smartphone revenue to drop in the low-teens percent range sequentially. Fiscal fourth-quarter revenue of 1.05 billion dollars did edge past the 1.04 billion estimate, but investors focused squarely on the disappointing outlook rather than the quarter that just ended. The market reaction was swift.

The Qorvo acquisition closed after the quarter, and Skyworks says it targets at least 500 million dollars in annual cost savings from the combination. That integration now has to deliver while handset demand stays soft. Traders will watch whether the guidance reset is temporary or the start of a longer slowdown for radio chip suppliers.