SWKS - Skyworks Solutions, Inc (was AHAA) Message Board

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Technology Stocks : SWKS - Skyworks Solutions, Inc (was AHAA)

SWKS 62.69

+0.6%

3:50 PM EST

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To: The Ox who wrote (1442)	9/10/2002 12:52:42 AM
From: Czechsinthemail	Read Replies (1) of 1698

More CSFB: Skyworks Solutions Inc (SWKS-$4.06-Cap $548M-PT $6.5-Outperform) Michael T. Masdea Initiating Coverage with a Outperform FY02 $(0.75); FY03 $(0.11); FY04 $0.13 * Initiating Coverage with BUY rating. We believe SWKS is the best-positioned wireless pure-play component supplier to profitably capitalize on the inflection point in handset outsourcing and the move to system solutions. In addition, we believe recent liquidity concerns are overstated. * Outsourcing Benefits Systems Providers. While we believe the shift towards outsourcing will strain profitability, SWKS should be a relative winner given it: (1) should increase its revenue/phone, taking share from point product competitors, (2) has the most complete product portfolio and SG&A infrastructure, and, (3) has relationships with all the major customers. * Financing. SWKS needs to pay CNXT $150M for a manufacturing facility. Current cash levels and cash flow forecasts suggest the company will have to raise funds before March 2003. While potentially a dilutive impact, we believe the current valuation discount to RFMD (>50%) overstates even an aggressive dilutive assumption (~37%). * Build Ramping, But May Not .... Recent supply chain datapoints suggest new builds are ramping. However, the 2H of Sept. could be weak due to delayed seasonality resulting from: (1) short lead times, (2) weakening consumer, (3) reduced cycle times, and (4) the hub-inventory relationships which shift inventory risk to component suppliers. Given this near-term environment, we would focus on SWKS given its leading customers and share-gain potential. * Estimates. Given the current lack of visibility, we are taking a conservative approach to our estimates. Our FY2002 revenue and EPS estimates are $542.5M and $(0.75). FY2003 estimates are $633.5M and $(0.11). FY2004 estimates are $727.6M and $0.13.

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