News Article
RFMD not on track with 19.5% loss in revenues
Sales to Nokia in FY Q3 2012 declined and are likely to continue to drop in the next quarter. Business with Samsung is however expected to grow fiscal year with fiscal year
RF Micro Devices has reported financial results for its fiscal 2012 third quarter ended December 31, 2011.
The firm's third quarter revenue was $225.4 million, a decrease of approximately 8% sequentially versus $243.8 million in the September 2011 quarter and a 19.5% decline over the same quarter the previous year. On a GAAP basis, gross margin was 28.2%, quarterly operating loss totalled $2.2 million, and quarterly net loss was $9.4 million, or $0.0) per diluted share.
During the December quarter, RFMD generated approximately $46.2 million in cash flow from operations and $37.5 million in free cash flow. The company repurchased approximately 2.3 million shares of common stock during the quarter and purchased and retired $6.0 million principal amount of convertible debt.
Quarterly shipments of switch and signal conditioning products exceeded $25 million. However, in a conference call held discussing the results, Dean Priddy, CFO and vice president of administration of RFMD remained tight lipped and said, "I believe for competitive reasons, we're going to discontinue breaking out the preciseness of where the growth is coming from".
Bob Bruggeworth, president and chief executive officer of RFMDdid however comment, "Over time, we clearly expect 3G to become a significantly larger portion of our portfolio in China. As I said in my opening comments, we grew about 50%. It's just we had expected to grow a lot more."
Financial Outlook and Business Commentary
For the March quarter, RFMD anticipates share gains in smartphones and projects 3G/4G products will represent approximately two-thirds of total cellular revenue. The Company currently forecasts a greater-than-seasonal decline in sales to cellular handset manufacturers in China, primarily as a result of the impact of lunar new year on order visibility and the projected impact of channel inventory.
For the March 2012 quarter, RFMD expects March quarter revenue of approximately $185 million and gross margin to improve 200-300 basis points. The firm also anticipates that it will reduce inventory levels and generate positive free cash flow.
Bob Bruggeworth commented, "Although RFMD's December quarter clearly did not live up to our expectations, RFMD's growth drivers are very much intact, led by industry-leading new products and the release of exciting new product categories, like RFMD's antenna control solutions. In the March 2012 quarter, we anticipate sales of 3G/4G components will continue to increase as a percentage of CPG revenue, and we expect MPG will outperform its underlying markets. We have begun to see signs of stabilisation in customer order activity, and we believe RFMD will return to growth in the June 2012 quarter."
Dean Pridd added, "During the December quarter, RFMD's market share gains in smartphones were offset by less than forecasted demand from manufacturers of handsets in China. Despite this, RFMD was able to generate cash flow from operations of approximately $46 million and free cash flow of approximately $38 million. In the March 2012 quarter, we currently expect sequential improvement in gross margin, and we anticipate RFMD's gross margin will return to historical levels as revenue growth resumes."
A webcast of the conference call discussing the results can be accessed by any interested party at http://www.rfmd.com (under "Investors").
A telephone playback of the conference may be accessed by dialling 303-590-3030 and entering pass code 4500529.
