RF Micro Devices Reels Following Revenue Warning

By Features FOXBusiness

Shares of RF Micro Devices (RFMD) plunged 20% to 52-week lows Friday morning as shareholders and analysts alike were spooked by a revenue warning from the chipmaker.

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Citing weaker-than-expected sales of 2G components to Chinese customers, the Greensboro, NC, tech company said late Thursday it expects to post fiscal third-quarter revenue of $225 million, missing its own forecast for $250 million.

RF Micro Devices also cited “broad weakness” in the end markets of its multi-market products group and warned it expects its gross margins to shrink quarter-over-quarter due to lower revenue, lower factory utilization and inventory reserves.

However, MF Micro said sales of its components for 3G and 4G smartphones rose 16% quarter-over-quarter.

“RFMD is navigating broadly lower demand in 2G handsets and softness across MPG's markets,” CEO Bob Bruggeworth said in a statement. “Despite this challenging macro environment, RFMD is winning new business with industry-leading products and technologies, and we fully expect to grow in fiscal 2013.”

Still, Wall Street punished RF Micro Devices for the gloomy news, sending its stock plunging 19.36% to $4.55 Friday morning. The losses come on top of a 27% decline in RF’s stock over the past year.

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The stock was also hit by some negative commentary from analysts.

Oppenheimer downgraded RF Micro to “perform” from “outperform,” while Bank of America Merrill Lynch trimmed its price target from $5.50 to $4.50.

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