8 November 2011

RFMD’s quarterly revenue rises 14% to $243.8m

For its fiscal second-quarter 2012 (ended 1 October 2011), RF Micro Devices Inc of Greensboro, NC, USA has reported revenue of $243.8m, down 14.7% on $285.8m a year ago but up 13.8% on $214.2m last quarter (well ahead of the growth rate of underlying markets). Nokia has “bottomed” at a little under 15% of revenue (down from about a third just two quarters ago, and about half at the beginning of fiscal 2011).

RFMD’s Multi-Market Products Group (MPG) saw a double-digit decline in revenue caused by broad-based softness across its end markets. However, this was more than offset by sequential growth in the Cellular Products Group (CPG), which is attributed mainly to broad-based market share gains in 3G/4G cellular handsets and smartphones as well as other emerging market business rebounded sharply.

Sales of 3G/4G cellular products grew more than 50% sequentially to over 40% of cellular revenue, supporting aggressive new product ramps at Foxconn, HTC, Samsung, Huawei, ZTE, RIM, LG, Motorola and others.

During the quarter, RFMD continued to ramp its ultra-high-efficiency 3G/4G power amplifier (PA) in support of HTC, Research In Motion, Lenovo, and others. It also secured multiple PA design wins on a Qualcomm reference design for the 3G entry market. Shipments of PowerSmart products more than doubled sequentially and surpassed $25m, in support of Samsung, LG, and Research In Motion (exceeding already the annualized $100m run rate targeted for the end of this fiscal year). RFMD also secured major design wins in smart energy/advanced metering infrastructure (AMI), point-to-point (P2P) radio for cellular backhaul, and gallium nitride (GaN)-based military radar products.

“We believe this is the beginning of a multi-year product and technology cycle, during which we will achieve consistent growth, diversification and market share gains,” says president & CEO Bob Bruggeworth.

On a non-GAAP basis, gross margin was 39.1%, down from 39.8% a year ago but up from 38.5% last quarter. Net income was $31.1m, down from $52.3m a year ago but up from $21.3m last quarter. Operating cash flow was $38.4m (doubling from $19.1m last quarter). After capital expenditure (CapEx) of $7.8m (down from $19.9m last quarter), free cash flow was hence $30.6m. During the quarter, RFMD repurchased about 1.7 million shares of common stock at an average price of $5.72. Overall, total cash, cash equivalents and short-term investments have hence risen from $255.6m to $276.6m.

RFMD believes that the demand environment in its end markets supports its expectation for December-quarter revenue to grow sequentially to about $250m. MPG revenue is expected to decline further, by about 10%, but this should again be more than offset by CPG revenue outpacing the cellular market, driven by further 3G/4G market share gains. Based on the projected revenue mix, RFMD expects gross margin to be roughly flat. Operating expenses should rise by about $1m.

“Today’s overlapping macro trends of mobility, broadband data and energy efficiency present the RF industry with a significant, long-term growth opportunity, while RFMD’s industry-leading products and technologies position us to outpace our industry and deliver market share gains,” says Bruggeworth.

“In the markets served by MPG, we continue to broaden our customer base and expand our product offerings. We are particularly enthusiastic about the increasing customer adoption of our industry-leading GaN technology in strategic market segments like military radar and CATV line amplifiers,” he adds.

“In the cellular market, we are expanding our customer relationships and winning additional content at the world’s leading smartphone manufacturers,” Bruggeworth continues. “Our newest design wins set up continued dollar content expansion in both smartphones and 3G entry handsets, while leveraging our already significant exposure to the industry’s leading baseband providers. Today these include Qualcomm, Intel, ST Ericsson, MediaTek, Spreadtrum, and others.”

See related items:

RFMD returns to sequential revenue growth

RFMD’s quarterly revenue drops 23% to $213.3m

RFMD’s revenue falls 2.4% due to 3G drop at Nokia

RFMD’s quarterly revenue grows 12% year-on-year to record $285.8m

RFMD’s revenue grows 29% year-on-year

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