RF Micro Sees March Quarter Stronger Than Expected
URL: investor.cnet.com
By Ben Klayman
CHICAGO (Reuters) - RF Micro Devices Inc., which makes semiconductors for wireless devices, said on Tuesday it expects results in its March quarter to exceed Wall Street expectations because of increased market share and industry growth.
Still, shares of the Greensboro, North Carolina-based company fell more than 4 percent. Analysts said the decline may be due to Credit Suisse First Boston's Monday downgrade of the wireless chip sector on fears of "unsustainable over-ordering" by customers.
"Given today's backlogs, the March quarter is set to be slightly higher than current consensus numbers," RF Micro Chief Financial Officer Dean Priddy told a Needham & Co. conference in New York.
"Either we're taking huge chunks of market share or the market is growing or both," Priddy said. "We think it's both."
Analysts on average were expecting RF Micro to earn 3 cents a share before one-time items on sales of $124.54 million in the fourth quarter ending in March, according to data tracking firm Multex.
U.S. Bancorp Piper Jaffray analyst Samuel May said RF Micro's outlook did not surprise him.
"(Priddy) is clearly saying he has good visibility," said May, who rates the stock at "outperform."
May does not own RF Micro stock, and U.S. Bancorp does not do banking work for the company.
PICKING UP BUSINESS
In a Monday research note, C.E. Unterberg, Towbin analyst Kalpesh Kapadia raised his sales and earnings estimates for the December and March quarters.
RF Micro has been picking up business with its largest customer, Finland's Nokia, which accounts for about half its sales, he said.
Kapadia also said RF Micro was diversifying by increasing its sales to another large customer, Motorola Inc., as well as to others such as South Korea's Samsung Electronics Co. Ltd..
He raised his rating on RF Micro to "buy" from "market perform" and set an $11 share-price target.
The company's stock was down 37 cents at $8.20 in late morning Nasdaq trade.
Kapadia does not own RF Micro stock. Nor does C.E. Unterberg, Towbin does not have banking business with the chipmaker.
Priddy also said there would be no negative surprises for the third quarter, which ended in December. RF Micro previously said results were tracking to the high end of its outlook for earnings of 4 cents to 5 cents a share before one-time items on sales of $128 million to $132 million.
Analysts expect a profit of 5 cents a share on sales of $131.2 million, Multex said.
RF Micro plans to report its third-quarter results on Jan. 21. |
