RF Micro Devices, Inc. (RFMD)

[eastunder]

Needham & Company Lowers Estimates & PT on RF Micro (RFMD); Softer Than Expected MPG and China 2G Demand

January 6, 2012 9:55 AM EST

Needham & Company maintains a 'Buy' on RF Micro Devices (NASDAQ: RFMD) price target lowered from $8 to $6.

Needham analyst says, "RFMD pre-announced F3Q12 (Dec) results citing both broad weakness in its MPG business and weaker than expected demand for 2G components from China-based customers. As a result, sales will be about 10% lower than previously forecast and GM will decline approximately 900bps sequentially. Though the near-term results are disappointing and force us to reduce our forward estimates, we continue to believe RFMD is gaining share at multiple tier-one OEMs with its expanding portfolio of 3G/4G components including its PowerSmart and Phenom PAs and its antenna switch and control products. Given its design win momentum with new products and our expectations that the MPG business will recover in the June quarter, we maintain our Buy rating on RFMD shares and view the pullback as a good buying opportunity."

"We have reduced our FY12 and FY13 estimates to $888MM/$0.22 and $935MM/$0.30 from $943MM/$0.38 and $1,088MM/$0.53, respectively."