CS First Boston Keeps 'Buy' on RF Micro

Analyst Michael Masdea says third quarter results beat his estimates, aided by stronger chip orders in June

CS First Boston keeps its buy rating on RF Micro (RFMD ).

Analyst Michael Masdea says the maker of chips for commercial wireless markets posted first quarter results that beat the company's recently cut guidance. Profits were aided by strong orders during the last three weeks of June.

Looking ahead, Masdea notes the company expects all of its top five customers to grow in the current quarter; he also thinks the company is benefiting from Nokia's delayed rollout of general packet radio system (GPRS) handsets. (Nokia is one of the company's top customers.) However, he notes margins are coming down due to pricing pressure.

Masdea upped his $429 million fiscal 2003 (Mar.) revenue estimate to $448 million, but keeps $0.08 fiscal 2003 earnings per share estimate; for fiscal 2004, he cut his $509 million revenue estimate to $503 million, and trimmed the $0.24 EPS to $0.12.

Finally, Masdea lowered his $17 target to $11.

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