News Article
RFMD Quarterly Revenues Increase 11% to $279 Million
The firm has also generated $54 million in free cash flow and has authorised a 2-Year, $200 million share repurchase plan.
RF Micro Devices (RFMD), a designer and manufacture of high-performance radio frequency components and compound semiconductor technologies, has reported financial results for its fiscal 2011 third quarter, ended January 1, 2011.
RFMD’s quarterly revenue increased approximately 11% year-over-year and decreased approximately 2% sequentially to $278.8 million. On a GAAP basis, gross margin was 37.0%, quarterly operating income totalled $43.3 million, and quarterly net income was $36.7 million, or $0.13 per diluted share.
During the quarter, the company generated $54.2 million in free cash flow.
RFMD’s Multi-Market Products Group (MPG) enjoyed strong underlying demand in its end markets, and each MPG business unit grew sequentially, led by wireless infrastructure, Smart Energy, WiFi for 3G/4G smartphones and tablets, defence, and high-power gallium nitride (GaN) applications. Its Cellular Products Group (CPG) saw accelerating design activity for 3G/4G smartphones across its PowerSmart power platforms, high-performance switch-based products, and recently launched family of single-mode power amplifiers (PAs).
RFMD supported the launch of a highly anticipated flagship 3G/4G smartphone and tablet product family featuring its PowerSmart and WiFi components. MPG commenced volume production of GaN products for applications in high-power military radar and CATV.
In the March quarter, RFMD expects total revenue to seasonally decline approximately 10%-15% and also expects an additional decline of approximately $25 million in transceiver revenue, consistent with the anticipated end-of-life of legacy transceiver products. The firm also anticipates its transceiver products will be immaterial to financial results in the June 2011 quarter and thereafter.
RFMD expects to commence volume shipments of PowerSmart in the March quarter and achieve free cash flow in fiscal 2011 in the range of $180-$200 million.
Bob Bruggeworth, president and CEO of RFMD, commented, “The March quarter represents an inflection point for RFMD as we close out our legacy transceiver business and begin the ramp of new, higher margin component solutions, including our PowerSmart power platforms, our industry-leading high efficiency single-mode PAs, our silicon-based switches, our GaN components, and our high-performance WiFi components.
“We are forecasting sequential growth in the March quarter in 3G/4G smartphones, wireless infrastructure and GaN-based products, and we expect to ramp 3G/4G smartphones featuring PowerSmart at an additional leading smartphone OEM each quarter of calendar 2011. This supports our expectations for broad-based share gains and positions RFMD to grow sequentially and expand gross margins during fiscal 2012, outpacing overall growth in our core markets.”
Dean Priddy, CFO and VP of administration of RFMD said, “RFMD’s capital efficient business model has generated two years of industry-leading free cash flow, with an outlook for continued superior free cash flow. During the December quarter, RFMD generated free cash flow of approximately $54 million, and RFMD has improved its net cash position by $405 million dollars over the past eight quarters.
“We are confident RFMD’s business model enables us to substantially grow our revenues and expand margins while achieving industry-leading capital efficiency. In fact, we believe we can approximately double our revenue without requiring additional GaAs fabrication capacity.”
“Based on this outlook and other factors, our Board of Directors has authorized a two-year, $200 million share repurchase plan. This provides us with the flexibility when market conditions warrant to significantly reduce our outstanding shares and offset potential future dilution from our convertible debt and awards under our equity-based compensation plans,” he concluded.
