RF Micro Devices, Inc. (RFMD)

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RF Micro's December Revenues Dip
By Zacks Equity Research | Zacks


Revenue yields have plummeted for RF Micro Devices Inc. (RFMD) for the December quarter of 2011. Total revenue came to around $225 million against the previous estimates of $250 million.

Now we turn to the segmental overview. The Cellular Products Group (:CPG) revenues were disappointing coming in at $179 million. Management stated that this was mainly attributable to the softness in demand experienced in the Chinese market this quarter which exacerbated the sales of the 2G devices greatly.

Moving on, the Multi-Market Products Group (NYSE:MPG - News) had no favorable results either, recording around $46 million only due to the end-market slowdown which pulled back the revenues of the segment from achieving the company’s prior forecasts.

The poor sales coupled with inefficient factory utilization and stacked up inventories in this quarter have diminished RFMD’s current gross margin forecasts by 9 percentage points sequentially for the December 2011 quarter.

As per Nasdaq.com, after the company’s quarterly revenue announcement, RF Micro’s shares deteriorated 16% in after-hours trading which again aggravates the areas of concern for RFMD and its investors.

In spite of the clouded scenario currently jeopardizing RFMD’s growth prospects, management has been optimistic about its March 2012 quarter. It believes that the company would stand strong against the winds of fiscal pressures of the macro environment and also ameliorate handset demands and MPG’s end-market sales. It relies on the company’s existing dominating market position, product and technological innovations and new contract awards to be hopeful of a full scale recovery and commendable growth results by fiscal year 2013.

However, further information on this subject is expected on RF Micro’s earnings release and conference call on January 24, 2012.

Operational since 1991 and headquartered in Greensboro, North Carolina, RF Micro Devices Inc. is a world leader in manufacturing and developing radio frequency devices and compound semiconductor solutions. It primarily caters to the original equipment producers and original design manufacturers in the US and other countries. Currently, the company’s greatest rivals are Broadcom Corp. (NasdaqGS:BRCM - News) and Skyworks Solutions Inc. (NasdaqGS:SWKS - News).