Seeking Alpha
Long only, contrarian, special situations, value
Profile| Send Message| ()  

RF Micro Devices (RFMD) reported earnings today that easily beat on the top and the bottom line. I have been positive on this Apple (AAPL) supplier for three months after I profiled it in October when it was trading more than 10% lower. Based on this latest report, the shares still have further upside.

Positives from RFMD's earnings report:

  • Revenues came in at over $271mm, up 29% sequentially and easily beating estimates of just under $246mm.
  • The company's CEO stated the "quarter reflected continued content gains, category expansion, and growth in our addressable markets"
  • Earnings came in a 8 cents a share, two cents above estimates.
  • The company sees next quarter revenue of $250mm to $255mm, easily above estimates of $228mm.

RF Micro Devices, Inc. designs and manufactures radio frequency components and compound semiconductor technologies primarily in the United States and Asia.

4 additional reasons RFMD still has further upside from $5 a share:

  1. Consensus earnings estimates for both FY2013 and FY2014 have moved up nicely since I profiled the company in late October.
  2. Revenue estimates for the next fiscal year were for around a 15% sales increase and I would look for those to be revised up based on this latest report.
  3. The company's two biggest customers are still Apple and Samsung (SSNLF.PK), so it is well positioned regardless of who takes the lead in the smartphone market.
  4. Earnings are set to double in FY2014 to 31 cents a share from around 15 cents a share in FY2013. The company also has a robust balance sheet with approximately 10% of its market capitalization in net cash.
Source: $5 iPhone Supplier Beats On Earnings And Is Heading Higher