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Mixed news from RFMD and Anadigics

RFMD has raised its revenue expectations for the third quarter, while Anadigics is maintaining its previous guidance but also shedding staff.
RF Micro Devices has increased its revenue projections for the third quarter of 2002 to approximately $118 million. This compares to guidance provided on July 16, 2002 of revenue of approximately $109 million to $114 million.

The revised guidance is due to RFMD s diversified product and customer base, coupled with an intrinsic strength in the handset market due to a growth in replacement sales.

"Our customer and product diversification efforts are paying off.," said Dave Norbury, RFMD s CEO. "We are experiencing broad-based strength across multiple customers and markets, which is increasing our capacity utilization and improving our order visibility into the December quarter."

The company said that it also anticipates a sequential increase in revenue from the September to the December quarter.

Anadigics remains on track, sheds jobs

Anadigics reiterated its previous guidance for the third quarter of 2002 of $21 million in sales, but also announced that it was reducing its workforce of 450 employees by around 10%.

The savings resulting from the reduction in force combined with several other cost reduction initiatives undertaken by the company will lower its cost structure by $2.5 million on a quarterly basis. The implementation of these actions by the company will lower its break-even EBITDA to approximately $25 million in revenue.

The company anticipates recording special charges in the third quarter 2002 of approximately $15 million to $17 million, partially offset by a gain of approximately $6 million to $9 million on the repurchase and retirement of a portion of its debt. The special charges are associated with the company s workforce reduction, a planned facility consolidation, the write-off of goodwill and certain fixed assets, and a charge for defective raw material inventory received from a former supplier that has ceased operations.

According to CIBC World Markets, Anadigics top customer in the second quarter, Kyocera, continues to see solid demand for its CDMA handsets in the US. However, the majority of Anadigics wireless sales are for CDMA handsets sold by Verizon and SprintPCS, and given the weakness cited by SprintPCS recently, CIBC World Markets believes that CDMA for Anadigics may be weak in the fourth quarter.

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