(Reuters) - RF Micro Devices Inc, a maker of chips that connect mobile devices to networks, forecast quarterly revenue above analysts’ estimates and said it expected rising smartphone sales to fuel growth in the second half of the year.
Shares of RF Micro, whose customers include Apple Inc and Samsung Electronics Co, rose about 7.5 percent in extended trading after the chipmaker also posted a better-than-expected profit for the fourth quarter.
“In terms of timing, we are beginning to support the volume ramps of many of this year’s most popular devices and we expect this to accelerate into the September quarter,” RF Micro Chief Executive Robert Bruggeworth said on a post-earnings call.
Apple is expected to launch the next version of its iPhone in September, the month in which the company usually introduces the latest versions of its products.
RF Micro is also positioned to benefit from the “Internet of Things”, Bruggeworth said, referring to machine-to-machine connectivity that allows devices on both wired and wireless networks to interact.
There is also speculation that Apple will launch wearable devices such as smartwatches, after Chief Executive Tim Cook spoke about “new product categories” for 2014.
Increasing demand for internet connectivity and social media while on the move is driving sales of mobile devices, which use more radio frequency chips than basic phones.
Smartphone users globally are expected to triple to 5.6 billion by 2019 from 2013, according to a report by network equipment maker Ericsson. (r.reuters.com/byd27v)
RF Micro said in February that it would buy rival Triquint Semiconductor Inc for about $1.6 billion to boost its offering in both phone and wireless network markets. The deal is expected to close in the second half.
RF Micro, whose radio frequency chips are also used in notebooks and tablets as well as radar equipment, forecast adjusted earnings of about 17 cents per share and revenue of $305 million for the first quarter ending June.
Analysts on average were expecting earnings of 11 cents per share on revenue of $277 million, according to Thomson Reuters I/B/E/S.
RF Micro’s net loss narrowed to $1 million, or break even per share, in the fourth quarter ended March 29 from $16 million, or 6 cents per share, a year earlier.
The company, which counts Samsung as its biggest customer, earned 12 cents per share, excluding items.
Revenue fell 8.8 percent to $256 million.
Analysts on average had expected a profit of 9 cents per share on revenue of $255.5 million.
Greensboro, North Carolina-based RF Micro’s shares closed at $8.09 on the Nasdaq on Tuesday.
Additional reporting by Supantha Mukherjee in Bangalore; Editing by Kirti Pandey