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Earnings roundup: RF Micro meets 2Q forecasts, sees weak 3Q

RF Micro Devices (Nasdaq: RFMD) met analyst estimates in the second quarter but warned of a disappointing third on Tuesday.

Shares of RF Micro fell to 15.5 in afterhours activity on the Island electronic communications network, following the announcement. RF Micro stock closed Tuesday's regular trading at 23, down 3.375 for the session.

The maker of amplifiers for wireless devices said lower-than-expected order activity in the second quarter will hurt revenues in the third quarter. RF Micro expects revenues for the December quarter to be down sequentially about 20 percent, which would result in diluted earnings per share in the range of about four cents to five cents.

First Call consensus was predicting a third quarter profit of 11 cents per share.

RF Micro said an overly optimistic forecast earlier in the year for the growth of the market has led to excess inventories of handsets, which has reduced component demand while these inventories are being reduced. The company described it as a "short-term market correction issue."

Second quarter net income was $17.7 million, or 10 cents per share, in line with consensus analyst estimates. Revenue rose 48.3 percent year-over-year to $102.2 million.

Other companies reporting quarterly results Tuesday:

  • Handspring (Nasdaq: HAND)
  • beat the consensus analyst forecast in the first quarter.

    The maker of handheld devices using the Palm OS reported a fiscal first quarter loss of $8 million, or 8 cents per share, excluding amortization costs. First Call consensus called for a loss of 12 cents per share for the quarter ended Sept. 30.

    First quarter revenue increased to $70.5 million, up 36 percent sequentially. Gross margin of 31.2 percent was up from the fourth quarter.

    Including amortization, Handspring lost $16 million, or 17 cents per share.

  • Xircom (Nasdaq: XIRC)
  • earned less than analysts expected in the fourth quarter.

    The vendor of modem and network cards reported fiscal fourth quarter earnings of $12.2 million, or 39 cents per share, excluding special charges. Analyst consensus predicted a profit of 42 cents per share.

    Fourth quarter sales increased to $134.1 million, up 16 percent year-over-year and 6 percent sequentially.

    Including acquisition related costs, Xircom earned $9.6 million, or 31 cents per share.

    For the full fiscal 2000, Xircom earned $53.7 million, or $1.76, not counting special charges. Full year revenue rose 17 percent to $496.2 million.

  • Turnstone Systems (Nasdaq: TSTN)
  • topped analyst forecasts in the third quarter.

    The maker of hardware and software that lets communications carriers provide DSL service reported third quarter net income of $12.8 million, or 19 cetns per share. Analyst consensus predicted a profit of 16 cents per share for the quarter ended Sept. 30.

    Third quarter revenue rose to $56.2 million, a 524 percent improvement year-over-year.

  • Covad Communications Group (Nasdaq: COVD)
  • Tuesday reported a wider-than-expected loss and said tight financial markets are causing some clients to have trouble paying bills, leading Covad to reduce its own sales by about $11.4 million.

    In afterhours activity on Island, Covad slipped to 5.87. The stock closed regular trading at 8.59375, down 0.3475 for the session.

    The DSL service provider reported a third-quarter net loss of $189.9 million or $1.22 per share on revenues of $66.7 million. Covad's earnings compared to a net loss of 47 cents a share on sales of $19.1 million in the same quarter last year.

    Analysts polled by First Call/Thomson Financial had forecast, on average, a loss of $1.18 per share.

    "Due to the weakness in the capital markets, nine of our channel partners have experienced financing difficulties and have slipped in their ability to stay current with their accounts receivable," Chief Executive Officer Robert Knowling, said in a statement. "To conservatively account for this, despite billing $78.1 million in revenue for the third quarter, only $66.7 million was recorded."

    Knowling said Covad has initiated a program to secure payment from the nine customers. "While we believe we will collect most of these revenues, we determined it would be prudent not to recognize revenue from these slow-paying (Internet service providers) in the third quarter," Knowling said.

  • Cadence Design Systems (NYSE: CDN)
  • beat the consensus estimate by two cents in the third quarter.

    The maker of chip design software posted earnings of $36.3 million, or 14 cents per diluted share, excluding unusual items and amortization costs, compared with a loss of $17.3 million, or 7 cents, during the same period the previous year.

    A consensus analyst estimate put the San Jose, Calif.-based company's third-quarter earnings at 12 cents a share, according to research firm First Call/Thomson Financial.

    Third quarter revenues rose to $332.5 million from $225.9 million in the year-ago quarter. Net income including unusual items and other costs was $13.7 million or 5 cents per diluted share, compared with a loss of $41.4 million or 17 cents per diluted share during the same period a year ago.>