RF Micro revenue forecast misses, WiFi chip demand slows

Reuters

* Sees 3rd-qtr adj EPS $0.13-$0.14/shr vs est $0.13

* Sees 3rd-qtr rev $310.7-$326.2 mln vs est $326.3 mln

* 2nd-qtr adj EPS $0.12/shr vs est $0.10

* 2nd-qtr rev $310.7 mln vs est $308.2 mln

* Shares fall 6.6 pct

By Lehar Maan

Oct 22 (Reuters) - Chipmaker RF Micro Devices Inc forecast current-quarter revenue below market expectations,saying it expects revenue from its wireless infrastructurebusiness to decline, mainly due to lower seasonal orders fromcable TV networks.

RF Micro's shares fell as much as 6.6 percent to $5.75 after the bell on Tuesday.

The company's multi-market products business unit, whichmakes routers and chips for wireless infrastructure such as WiFiconnectivity, is its second-biggest revenue generator.

"I think the disappointment is that revenue forecast isn'tas high as expectations," Charter Equity Research analyst EdwardSnyder told Reuters.

"Sounds like their core business of handsets is doing betterthan expected, but their non-handset business has beenweaker...I would expect its predominantly WiFi," Snyder added.

Revenue from RF Micro's its multi-markets products groupslipped 2.1 percent in the year ended March due to lower demandfor wireless infrastructure products. The segment contributedabout 21 percent to total revenue.

RF Micro said on Tuesday it expected revenue from thebusiness to decline in the current quarter ending Decembercompared with the just-finished second quarter.

"It's pretty common for us to see cable TV network buildoutsslow down in the winter months, causing cable networking to beslower in the December quarter for us," a company executive saidin a post-earnings conference call.

RF Micro's chips are used in broadband routers to provideWiFi connectivity and in base stations installed by telecomoperators to transmit wireless network.

The chipmaker, which also supplies cellular radio frequencychips for use in mobile devices such as handsets, notebookcomputers and tablets, forecast third-quarter adjusted earningsof 13-14 cents per share.

Revenue is expected to be flat to up 5 percent, implyingrevenue of $310.7 million to $326.2 million.

Analysts on average were expecting earnings of 13 cents pershare on revenue of $326.3 million, according to Thomson ReutersI/B/E/S.

RF Micro, which counts Samsung Electronics Co Ltd as its biggest customer, reported net income of $5.9million, or 2 cents per share, for the second quarter, comparedwith a net loss of $16.5 million, or 6 cents per share, a yearearlier.

Increasing demand for internet connectivity and social mediawhile on the move is driving sales of mobile devices, which usemore radio frequency chips than basic phones.

RBC Capital Markets analyst Doug Freedman said in Septemberthat a tear-down of Apple Inc's iPhone 5s and 5c modelsshowed that RF Micro and Skyworks Solutions Inc hadreplaced the main antenna switch previously supplied to iPhonesby Peregrine Semiconductor Corp.

"For now on they are the bigger player in iPhone so it'svery good for the fourth quarter," D. A. Davidson & Co analystThomas Diffely told Reuters.

RF Micro is also expected to benefit from the roll-out ofnew high-end phones from Samsung, which accounted for about 22pct of the company's net revenue in the year to March.

Excluding one-time items, RF Micro earned 12 cents pershare, above the average analyst estimate of 10 cents per share.Revenue rose 48 percent to $310.7 million. Analysts on anaverage had expected revenue of $308.2 million.

Greensboro, North Carolina-based RF Micro's shares closed at$6.16 on the Nasdaq on Tuesday.

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