By Elsa Ohlen

Skyworks Solutions stock fell sharply Thursday after the chip maker said intensified competition for Apple's iPhone business would lead to a significant drop in sales going forward.

The stock plummeted 27.5% to $63.08 in premarket trading Thursday.

Skyworks makes semiconductors used in consumer electronics including iPhones. Apple is its biggest customer.

In what Skyworks Chief Financial Officer Kris Sennesael described as a "setback," the chip maker expects its share of the business to supply Apple with components for its products will decline by 20% to 25%.

"The last couple of years have been challenging as the competitive landscape has intensified," Sennesael said in an earnings call with investors Wednesday afternoon.

It relates to the upcoming phone cycle, expected to be launched in the fall of 2025, Sennesael added, anticipating lower revenue in the fourth quarter as well as throughout fiscal 2026.

Calling it a setback may be putting it mildly -- Susquehanna analyst Christopher Rolland described it as a "nightmare realized." He lowered his price target to $70 from $100, reiterating a Hold rating on the stock.

However, Rolland also noted that Skyworks said opportunities with other customers would in part offset the business lost with Apple in 2026, and that the company is hoping for a recovery in 2027 with opportunities in the iPhone 18.

Skyworks didn't say what company would gain the content loss in the iPhone 17 but several analysts expect it will be Broadcom.

Despite the gloomy outlook, Skyworks' fiscal first-quarter earnings were solid. Revenue was $1.1 billion, in line with analysts' estimates, according to FactSet. Quarterly adjusted earnings were $1.60 a share, slightly above expectations of $1.57.

Coming into Thursday, shares have fallen 17% over the last 12 months.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 06, 2025 08:17 ET (13:17 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.