RF Micro Devices Turns To Profit In Q3; Sees Q4 Results Below Estimates

(RTTNews) - Chipmaker RF Micro Devices Inc. (RFMD) on Tuesday reported a turnaround to profit in the third quarter on higher revenues as well as margins. Adjusted earnings per share for the quarter matched analysts' expectations, while revenues missed their estimates.

Looking ahead, the company forecast financial results for the fourth quarter below Street expectations. Shares of the company declined more than 2 percent in extended trades.

The Greensboro, North Carolina-based maker of high-performance radio frequency solutions said its net income for the third quarter was $6.24 million or $0.02 per share, compared to net loss of $1.44 million or $0.01 per share in the year-ago period.

Excluding share-based compensation, amortization costs and other items, adjusted earnings for the quarter were $36.36 million or $0.13 per share, compared with adjusted earnings of $21.28 million or $0.08 per share in the year-ago period. On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter grew 6 percent to $288.52 million from $271.21 million in the prior-year period. Analysts had a consensus revenue estimate for the quarter of $320.06 million.

According to RF Micro Devices, the growth in revenues were due primarily to dollar content increases in smartphones. Gross margin for the quarter expanded 530 basis points from the year-ago period to 37.3 percent.

Looking ahead to the fourth quarter, RF Micro Devices expects adjusted earnings of $0.09 to $0.10 per share and revenues of about $250 million to $260 million. Analysts expect the company to report earnings of $0.11 per share for the quarter on revenue of $287.26 million.

RF Micro Devices expects adjusted gross margin for the fourth quarter of about 40 percent.

Bob Bruggeworth, president and CEO of RFMD, said, "RFMD is executing on multiple opportunities to increase our dollar content generation-over-generation in the world's leading smartphones and tablets while materially enhancing our operating model. In the March quarter, we anticipate another quarter of margin expansion and year-over-year improvements in operating income and earnings per share."

RFMD closed Tuesday's regular trading session at $4.89, down $0.01 or 0.20 percent on a volume of 12.12 million shares. In after-hours, the stock declined $0.11 or 2.25 percent to $4.78.