Investors took a rosier view of the stock market on Friday, with Wall Street looking to close the week with solid gains. The Nasdaq Composite(NASDAQINDEX: ^IXIC) led the way higher, with the index rising more than 1.6% as of 1:30 p.m. ET.
High-profile tech names have been the big movers on the Nasdaq this week, with Amazon weighing in late Thursday with favorable results that sent the entire market higher. However, a couple of other stocks weren't able to join in the rally after releasing their own financial reports. Below, you'll learn why SkyWest (NASDAQ: SKYW) and Skyworks Solutions (NASDAQ: SWKS) hit the skids heading into the weekend.
SkyWest loses altitude
Shares of SkyWest were down more than 22% early Friday afternoon. The regional airline produced solid financial results in the fourth quarter, but concerns about how 2022 might go caused trouble for shareholders.
SkyWest's numbers showed considerable progress from year-earlier levels. Fourth-quarter net income came in at $4 million, or $0.09 per share, which reversed a substantial loss in the year-ago period of $46 million. That closed a strong recovery in 2021, with adjusted earnings of $3.46 per share bouncing back nicely from red ink in 2020. Revenue was up 32% year over year to $777 million, as block hours on completed flights climbed 30% from a year ago. Block hours are a utilization metric that looks at the time from when the aircraft door closes on departure to when it opens at the gate of the destination airport
Image source: Getty Images.
But what really hit the stock was news that the airline is having difficult with staffing challenges. As a result, SkyWest believes that its block hours in 2022 could fall 10% to 15% from 2021 levels. That's a move in the wrong direction that's completely inconsistent with the recovery in the airline industry that most investors have been hoping to see.
SkyWest was just one of many airlines that saw its stock jump in early 2021 on hope for a quick end to the pandemic, only to have that hope crushed and the stock fall back down. Today's plunge brings SkyWest's stock price close to where it was during early 2020, and that suggests real worry about lasting impacts on the industry.
Skyworks isn't a semiconductor winner
Elsewhere, shares of Skyworks Solutions were down almost 4%. That's not a huge decline, but it reflected some concerns about whether the semiconductor business could sustain the record results the industry has seen lately .
Skyworks' fiscal first-quarter numbers were mixed. Revenue of $1.51 billion was an all-time high, inching higher year over year but rising 15% from three months ago. However, much higher costs of goods sold led net income to fall 21% to $400 million. Even on an adjusted basis, earnings of $3.14 per share were down almost 7% year over year.
Nevertheless, Skyworks said that the conditions in the semiconductor industry remain favorable. Specifically, the company called for revenue of $1.3 billion to $1.36 billion, and adjusted earnings of $2.62 per share. That would represent double-digit percentage growth from year-earlier levels, but it seemed not to be enough to convince investors of Skyworks' longer-term prospects.
It's always hard when an industry is seeing unprecedented growth to project forward and guess how long the good times will last. Based on Skyworks, investors seem to be a little more cautious about what the future will bring, and that's making the stock continue its six-month-long fall.
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