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Qorvo, Inc. Message Board

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  • techinvestor13 techinvestor13 Jan 25, 2005 11:25 PM Flag

    Expecting Better Margins

    In previous conference calls, management maintained that the core power amplifier business has very good profit margins. It is the investement in new business that has been the gross margin drag for RFMD so far, namely their investement in Bluetooth and WLAN. Bluetooth should reach breakeven and profitability this year, but WLAN may continue to be dilutive for another year.

    Additionally, RFMD is spending only 50% of their R&D on the core PA business...the other 50% of their R&D is going into their new product lines , the Gallium Nitride, cmosPA, and WLAN....all products that can and will contribute immensly into RFMD's top and bottom line in the future....

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    • What a pleasure to hear someone talk who knows something about RFMD.

    • Thanks for the glimmer of hope.

    • rfmd_back_up_the_truck_b_eye_tch rfmd_back_up_the_truck_b_eye_tch Jan 26, 2005 8:49 AM Flag

      I listened to the CC, a couple of positive things are profit margins will be back into the low to mid 40's as these ramps are completed, they are shipping Polaris and Polaris 2 to every large OEM and volume shipments will commence this year. The best thing I heard was the fact that this quarter will be flat with revenues in the low to mid 150's which means margins are definitely improving, after all, the $169 million in revenue was flat this quarter in a profit sense. Company will be profitable this year and they are starting to obtain major business in the USA for a change, so their dependency on China will decrease which cannot hurt. They seemed very confident with this year, but they were very confident in 2004 too. So, best scenerio I see from what they said is the June quarter starts the new RFMD with all of their products finally bringing significant revenues. Until then, well, flat is flat. EDGE and Wideband CDMA is the future of this company. Time will tell. Later, The Truck

    • You do a fine job of articulating a concise explanation of why (in part) RFMD's margins are not as they might otherwise be. It's unfortunate that RFMD themselves seem unable to do so.