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