25 July 2012

RFMD’s quarterly revenue and margins grow, driven by diversified markets

For its fiscal first-quarter 2013 (to end-June 2012), RF Micro Devices Inc of Greensboro, NC, USA has reported revenue of $202.7m. This is down 5.4% on $214.2m a year ago but up 8% on the trough of $187.9m last quarter, reflecting diversified growth in the Cellular Products Group (CPG) and Multi-Market Products Group (MPG).

CPG achieved robust sequential growth in sales of ultra-high efficiency 3G/4G power amplifiers (PAs), 3G entry PAs, and switch and signal conditioning products. CPG ramped volume production of multiple 3G/4G antenna control solutions and started volume shipments of its second-generation ultra-high-efficiency LTE PAs, both in support of a “leading manufacturer of smartphones”. CPG also supported multiple smartphone OEMs with RF semiconductor solutions containing all 2G/3G PA and switch content for the entire cellular RF front end.

MPG grew sequentially across multiple diversified markets, led by high-performance WiFi front-end modules and broadband gallium nitride (GaN)-based products for cable television (CATV). MPG captured a major 802.11ac WiFi reference design win with Broadcom for WiFi front-end modules, and expanded its portfolio of 802.11n and 802.11ac front-end modules and started production in support of consumer premises equipment (CPE) and mobile applications. Also, MPG’s GaN Power Group added two major L/S-band radar customers.

“RFMD is capturing share on multiple flagship smartphones and diversifying across a broad set of customers,” says president & CEO Bob Bruggeworth. “During the June quarter, we continued to realize the benefit of an expanding product portfolio with industry-leading products, highlighted by sales of our ultra-high-efficiency 3G/4G PAs, 3G entry PAs, WiFi front-end modules, and cellular switch and signal conditioning products,” he adds.

On a non-GAAP basis, gross margin was 34.1%, down on 38.5% a year ago but up on 32.4% last quarter as it continues to cover from the low of 30.2% in the December quarter.

Operating expenses have risen further, from last quarter’s $63.8m to $65.9m, including R&D expenses of $40.1m (up again, from $39.2m). Although still well down on $21.3m a year ago, net income was $1.9m, rebounding from a loss of $5.4m last quarter.

During the quarter, cash flow from operations was $15.6m, down from $20.5m last quarter (which itself was less than half of the prior quarter’s $46.2m). Capital expenditure has fallen back slightly from $9.6m last quarter to $9m. Free cash flow was $6.6m, down from last quarter’s $10.9m (which was down on the prior quarter’s $37.5m). However, RFMD also repurchased about 1.9 million shares of common stock and retired about $48m principal amount of debt. Total cash, cash equivalents and short-term investments has hence fallen from $300.4m to $250m.

“While the macro economy and the timing of key customer smartphone programs is moderating our near-term outlook, RFMD is launching multiple incremental growth drivers in new segments, including antenna control solutions, WiFi front-end modules, and GaN power devices, and we anticipate robust growth and market share gains in these segments as they continue to expand,” says Bruggeworth. “We are especially enthusiastic about new key program ramps beginning later in the September quarter that we anticipate will support incremental growth beginning in the December quarter and continuing into calendar 2013,” he adds.

“During the June quarter, RFMD’s diversified revenue growth supported broad improvement in RFMD’s financial performance,” notes chief financial officer & VP of administration Dean Priddy. “Looking forward, we expect continued sequential improvement in gross margin in the September quarter,” he adds. “In the December quarter, we anticipate broad improvement in RFMD’s financial performance, highlighted by a return to sequential revenue growth, as well as continued margin expansion and improved operating leverage.”

RFMD notes that its financial outlook reflects the timing of key customer program ramps and moderating growth among certain customers. During the September quarter, the firm expects to expand its alignment with leading customers and channel partners, targeting 3G/4G products and high-performance WiFi. It also expects multiple new customer product launches starting later in the current quarter.

RFMD believes that the demand environment in its end markets supports its expectation that September-quarter revenue will be flat to down sequentially by about 5%, prior to sequential growth resuming in the December quarter. The firm also expects gross margin to rise by about 50 basis points (to 34.6%). Operating expenses should be roughly flat.

See related items:

RFMD’s quarterly revenue falls 16.6% to $187.9m

RFMD’s quarterly revenue falls 19% year-on-year to $225.4m

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

RFMD returns to sequential revenue growth

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

Tags: RFMD

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