RF Micro to Restructure, Cut 350 Jobs

Instead, RF Micro will focus on making chips for communications infrastructure equipment, a business that boasts the company's highest profit margins, as well as so-called front-end components that control a cell phone's radio chip.

With the moves, RF Micro expects to achieve an adjusted operating margin of at least 10% and double-digit return on invested capital by the end of the 2008 calendar year.

The Greensboro, N.C.-based chipmaker announced the restructuring plan after Tuesday's market close, along with results for its fiscal fourth quarter in which RF Micro posted a loss of $16.4 million, or 6 cents a share.

At this time last year, RF Micro had a profit of $30.1 million or 14 cents a share.

Excluding stock compensation expenses and restructuring and amortization charges, RF Micro earned EPS of a penny, in line with Wall Street expectations.

Of course, analysts were expecting a much higher EPS three months ago, when the chipmaker delivered a weak financial outlook due to slowing demand in the cell phone handset business and product launch delays among certain customers.

The fact that MotorolaMOT, RF Micro's second-largest customer, is exploring spinning off its handset division has not helped.

Sales for the three months ended March 29 totaled $221.9 million, in line with analysts' expectations and down roughly 14% year-over-year.

In the current quarter, RF Micro projected sales between $230 million and $245 million, vs. the average analyst expectation of $238.3 million. The company forecast adjusted EPS of one penny to 2 cents, compared with the 2 cents EPS expected by analysts.