RF Micro Narrows Loss

Updated from 4:56 p.m. EDT

RF Micro Devices(RFMD) narrowed its losses in its fiscal fourth quarter, as strong sales of the company's radio chips for advanced cell phones generated better-than-expected results.

In the three months ended March 31, RF Micro posted sales of $226 million, up 50% from the year before, and above the company's guidance of $200 million to $215 million.

RF Micro had a net loss of $1.6 million, or a penny a share, largely as a result of a share-based compensation expense arising from the impact of variable accounting associated with the company's option-exchange program. In the fourth quarter of 2005, RFMD lost $63 million, or 34 cents a share.

Excluding the charge, RF Micro earned 9 cents a share. On that basis, analysts polled by Thomson First Call were expecting the company to earn 6 cents a share on sales of $210.4 million.

The company said its growth was driven by all three of its business units: cellular, wireless connectivity and infrastructure.

With worldwide sales of cell phones growing at a brisk pace, companies that supply chips for the handsets such as RF Micro and Texas Instruments(TXN) have seen their fortunes rise. Last week, TI reported strong financial results, as revenue from chips for advanced 3G cell phones doubled year over year .

RF Micro executives said that the top-tier cell phone handset makers are consolidating their suppliers -- a trend that is helping the chipmaker.

"We are deepening our very strong relationship and growing our dollar content with the world's leading OEMs," said CEO Bob Bruggeworth in a conference call with analysts following the release of the financial results.

During the fourth quarter, Bruggeworth said average selling prices in the company's cellular division rose 8% sequentially, as the company sold higher-margin chips like its Polaris product, which acts as a transceiver on new, high-speed cell phones.