RF Micro Devices falls to 52-week low on weak Q3 outlook
Shares of RF Micro Devices, Inc. (Nasdaq: RFMD) fell to a 52-week low today on news before the start of trading that the maker of wireless technology components lowered its fiscal third-quarter outlook.
The Greensboro, N.C.-based company announced that it forecasts revenue for the three months ended Dec. 29, 2007, to be about $268 million, which is well below the $282 million forecasted by 20 analysts polled by Thomson Financial.
RF Micro Devices, which has offices in China, Taiwain, Europe and the United States, expects to report earnings of either $0.06 per share or $0.07 per share, down from the previous guidance of between $0.08 per share and $0.09 per share. Wall Street was looking for a net income of $0.08 per share.
“RFMD entered the December 2007 quarter prepared to meet strong customer backlog that subsequently weakened late in the quarter,” president and CEO Bob Bruggeworth said in a statement.
“The problem is relatively localized,” Harsh Kumar, managing director at Memphis-based investment bank Morgan Keegan & Co., said in a phone interview. “The overall market itself is fine and [the company]’s competitors are doing well.”
Factors unique to RF Micro Devices explain the lowered outlook.
“They are more exposed to the older GSM standards,” Kumar explained. “There is a slowdown in that space, particularly in China and with Motorola, which accounts for about 15% to 20% of revenue.”
Despite today’s bearish news, Kumar upgraded the stock to “outperform” from “market perform,” primarily based on valuation and sales.
“We think that the current weakness is overdone, particularly if you have a longer view,” he said.
The Greensboro, N.C.-based company announced that it forecasts revenue for the three months ended Dec. 29, 2007, to be about $268 million, which is well below the $282 million forecasted by 20 analysts polled by Thomson Financial.
RF Micro Devices, which has offices in China, Taiwain, Europe and the United States, expects to report earnings of either $0.06 per share or $0.07 per share, down from the previous guidance of between $0.08 per share and $0.09 per share. Wall Street was looking for a net income of $0.08 per share.
“RFMD entered the December 2007 quarter prepared to meet strong customer backlog that subsequently weakened late in the quarter,” president and CEO Bob Bruggeworth said in a statement.
“The problem is relatively localized,” Harsh Kumar, managing director at Memphis-based investment bank Morgan Keegan & Co., said in a phone interview. “The overall market itself is fine and [the company]’s competitors are doing well.”
Factors unique to RF Micro Devices explain the lowered outlook.
“They are more exposed to the older GSM standards,” Kumar explained. “There is a slowdown in that space, particularly in China and with Motorola, which accounts for about 15% to 20% of revenue.”
Despite today’s bearish news, Kumar upgraded the stock to “outperform” from “market perform,” primarily based on valuation and sales.
“We think that the current weakness is overdone, particularly if you have a longer view,” he said.
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