Wireless IC makers report mixed results

RF Micro Devices reported revenues of $100.6 million for the December 2001 quarter, a sequential increase of 2.3% versus $98.3 million for the quarter ended September 30, 2001 and an increase of 25.8% versus revenues of $79.9 million for the December 2000 quarter. Net income for the quarter was $3.5 million, or $0.02 per diluted share. Based on current backlog, RFMD expects revenues of approximately $90-95 million and earnings per share of approximately $0.01 for the quarter ending March 31, 2002. The Company is currently fully booked for the low end of that range. For the year, management currently believes the Company s revenues will grow in excess of the handset market as it extends its power amplifier market share, expands its content in handsets beyond power amplifiers, diversifies into new markets and adds new customers. During the December quarter, other operating expenses totaled $2.5 million, representing startup costs related to the facility in China and one month of startup costs related to the second wafer fab.

Outlook: David Norbury, president and CEO of RF Micro Devices, said, "We are pleased to report a solid December quarter, marked by sequential improvements in revenues, gross profit, net profit and earnings per share. We believe we positioned ourselves extremely well for continued growth in the upcoming calendar year. We estimate we are in more handset models than at any other time in the Company s history, and we have made significant strides continuing to expand into high-growth opportunities outside the handset market. "Although we currently anticipate revenues will dip slightly in the March quarter, we currently expect this decline will be less than the seasonal decline that has been widely forecast for the handset industry. Beyond March, we believe our strategic focus positions us extremely well to grow our revenues at a rate in excess of the handset market.

Alpha meets estimates, sees end to inventory problems by March

Alpha reported net sales for the December 2001 quarter of $33.1 million, compared with $33.0 million in the September 2001 quarter and $78.7 million for the comparable period a year earlier. The adjusted net loss for the December 2001 quarter was $1.9 million, or $0.04 per diluted share, compared with a net loss of $2.6 million, or $0.06 per share, in the September 2001 quarter and net income of $11.6 million, or $0.26 per diluted share for the December quarter a year ago. The adjusted net loss for the December 2001 quarter excludes transaction costs of $2.1 million for expenses related to Alpha s previously announced merger with the wireless business of Conexant Systems, Inc. "We are pleased that we achieved our third-quarter financial guidance with a significant improvement in our bottom-line results, said David Aldrich, Alpha s president and CEO. "Equally significant, our InGaP HBT power amplifier module ramp exceeded our expectations. We shipped more than 300,000 power amplifier modules during the quarter, with yields of greater than 90 percent. These results rivaled the yields for our mature MESFET and PHEMT products. Finally, we are moving forward with preparations for integrating Alpha and Conexant s wireless business.

Outlook: "The wireless handset business is forecasted to be seasonally slow during the March quarter, Aldrich said. "In addition, handset sell-through for the December quarter appears to be coming in lower than the majority of our customers had anticipated. As a result, current levels of inventory in the channel are slightly higher than expected. Based on our customer inputs and channel checks, however, we believe these inventories will be eliminated by the end of the March quarter. Although our visibility into the March quarter is somewhat limited, we expect that Alpha s new product ramp and gains in market share will enable us to avoid the seasonal wireless downturn. Therefore, we expect our total net sales and operating results for the March quarter to be similar to the levels reported for the December quarter.

Conexant losses not as bad as anticipated

Conexant Systems reported a pro forma net loss for the December 2001 quarter of $107.7 million, or $0.42 per share, an improvement of 21 percent over the pro forma net loss of $136.6 million, or $0.54 per share, in the prior quarter. This loss figure was slightly lower than analysts predictions. Revenues were $229.5 million for the December 2001 quarter, an increase of 14% from the previous quarter, exceeding the 10 percent sequential growth expectation established in the company s mid-December updated outlook. First fiscal quarter revenues were driven by strong performance in the company s wireless communications business, which recorded sequential growth of 42 percent, and supported by solid sequential growth in its broadband access business of 8 percent.

Outlook: "We made solid progress this past quarter, delivering higher sequential revenue growth than originally planned as a result of market share gains across a number of key segments and revenue traction from the launch of new products, Decker said. "We are entering our March quarter, a seasonally weak period, with a sequentially higher backlog. As a result, we expect to build on our higher first fiscal quarter revenue base. In particular, we anticipate that both our wireless and broadband businesses will be flat to slightly up on a sequential basis. "In total, despite a seasonally weak environment, we expect Conexant s second fiscal quarter revenues to be up modestly over the prior quarter, and we expect to deliver a further 10 percent sequential improvement in the level of our pro forma operating loss, Decker concluded.

PA shipment delays hit Celeritek

For the December 2001 quarter, Celeritek reported net sales of $14.7 million, compared to net sales of $24.2 million for the same period a year ago. The pro forma net loss for the quarter, excluding an impairment charge of $10.9 million, was $1.0 million, or $0.08 per diluted share and the generally accepted accounting principles, or GAAP, net loss for the quarter was $11.9 million or $0.99 per diluted share. This is in comparison to GAAP net income of $2.6 million, or $0.21 per diluted share, for the December 2000 quarter. The Company s sales of semiconductor products were $6.5 million in the December 2001 quarter, down from $13.0 million in the December 2000 quarter and down sequentially from $9.1 million last quarter. The December 2001 quarter revenue level compared to the September 2001 quarter was the result of customer-requested delays in shipments of power amplifier modules for use in mobile handsets. Sales of subsystem products in the December 2001 quarter to the defense market were $5.8 million, up sequentially from $5.0 million in the last quarter and up from $3.2 million in the comparable quarter last year. Revenue from subsystem products for infrastructure applications remained soft at $2.4 million compared to $8.0 million in the December 2000 quarter.

Outlook: Celeritek does not expect sequential revenue levels to increase for the next several quarters. The Company is focusing on new product developments, including power amplifier modules and new products for the WLAN and infrastructure markets. "In the third quarter, to expand our high frequency technology, we entered into an agreement with a foundry to develop an Indium Phosphide process, commented Tamer Husseini, president and CEO. The Company recorded an impairment charge of $10.9 million related to unutilized wafer fabrication equipment and leasehold improvements undertaken to increase its wafer fabrication area. The Company is reviewing the feasibility of consolidating its operations into one facility. If the Company does consolidate its operations, the fourth quarter results will include a restructuring charge of up to $2.5 million. www.rfmd.com
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E-mail: tim.whitaker@iop.org