Stock Market Champs..........10-03-06

Skyworks Solutions Inc. (SWKS)

Last Trade:	6.94
Trade Time:	11:53AM ET
Change:	1.88 (37.17%)

Shares of Skyworks Solutions Inc. rose in premarket trading Tuesday, a day after the maker of integrated circuits said it plans to exit its baseband operations in order to focus on research and sales for its core business.

Baseband chips convert digital sounds into sounds in mobile phones. Woburn, Mass.-based Skyworks also said it will cut 425 jobs, or 10 percent of its worldwide workforce, as part of a restructuring plan.

In premarket trading, Skyworks shares rose $1.73, or 34 percent, to $6.79. The stock has traded in a 52-week range of $4.03 to $8 and is almost flat since the beginning of the year.

In a client note, Stifel Nicolaus analyst Cody G. Acree lifted his rating to "Buy" from "Hold," and set a $10 target price.

"With Skyworks' exit of the baseband business, the company is making a solid step toward addressing the largest ongoing concern of investors, which we believe to be its lack of sustainable and meaningful profitability," wrote Acree. Gross and operating margins will almost immediately improve with the disposal of the baseband segment, the analyst wrote.

The company also makes power amplifiers and radio products, and its core business, excluding baseband revenue, has grown 17 percent since 2002, the analyst added.

Citigroup analyst Craig A. Ellis also reaffirmed a "Buy" rating and said he approved of the company's plan to exit the baseband segment.