(Reuters) - Apple supplier Skyworks Solutions beat market estimates for quarterly profit on Tuesday, as stabilizing end-markets and growing usage of 5G technology boost demand for the chipmaker's solutions.
As telecom companies continue to roll out 5G technology beyond the smartphone, chipmakers are seeing a new pool to turn to other than traditional markets such as Personal Computers.
Artificial Intelligence (AI) has also been a catalyst for wireless solutions in automotive, mobile and other major client sectors of the company.
Apple, one of Skyworks' biggest clients, ended 2023 by commanding a 20% market share in smartphone sales and was one of the few smartphone sellers who saw sales growth despite high inflation and an unstable economy.
"Excess supply conditions are abating and inventory levels in the distribution channel and at the OEM level are normalizing," said Skyworks CEO Liam Griffin in an investor call.
Shares of the company were up 1.7% after the bell.
Skyworks expects mobile business to be seasonally down sequentially, consistent with historical patterns. In broader markets, the company sees modest growth off the December quarter with inventory levels normalizing in certain end-markets.
The chipmaker also forecast revenue to be between $1.02 billion and $1.07 billion and adjusted earnings of $1.52 per share at the mid-point, for the March quarter.
For the first quarter, the company reported revenue of $1.20 billion, in line with market expectations.
On an adjusted basis, the company earned $1.97 per share compared with estimates of $1.95.
(Reporting by Yamini Kalia in Bengaluru; Editing by Krishna Chandra Eluri)