The RF Micro Devices Debacle

Most companies issue a mid-quarter update for the current quarter if they stay that in touch, but it is rare when they reaffirm for this quarter and warn for the next.  Welcome RF Micro (RFMD-NASDAQ).  RFMD confirmed its revenue and earnings per share guidance for the fourth fiscal quarter ending March 31, 2007, which was originally provided on January 23, 2007; and announced the achievement of a major milestone-its fiscal year revenue will exceed $1 billion for the first time in the Company’s history.  But…….

Dean Priddy, CFO and vice president of administration of RFMD, stated, "While we’ll deliver a solid March quarter and fiscal year 2007, looking into the first quarter of fiscal 2008, we currently anticipate a slowdown in demand from a top tier customer that will impact our operating results. While we are seeing increasing strength with other customers, our customer forecasts in the aggregate currently indicate a sequential decrease in the June quarter, compared to the March quarter, in revenue, margins and earnings per share……"

The CEO has many feel good comments you can read about here, but the company also announced a proposed convertible note offering of $150 million.  RFMD is down 5% to $6.70 in after hours trading, and that is after a 4% drop in normal trading; its 52-week trading range is $5.25 to $9.58.  Its market cap is $1.35 Billion as of the close.

Jon C. Ogg
March 28, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.