TriQuint Says the Future Isn't as Scary as It Was

From deep inside his igloo, TriQuint (TQNT) CEO Steve Sharp can see a glimmer of sunlight.

The wireless and wireline component maker conducted its monthly outlook update Tuesday after the market's close, reaffirming the company's projections for the third quarter. TriQuint plans to generate $80 million in revenues, good for 3 cents a share in pro forma earnings, a 30% increase over the second quarter's $60.7 million revenue. Factoring in merger- and investment-related charges, the company will post a 5.5 cent-per-share loss.

After spending the better part of 2001 in the dark, Sharp explained in his frank style that TriQuint has seen "some pickup in demand across most product lines" in its mobile-phone component business. He believes the general improvement comes from "the beginning of the Christmas build season, coupled with an overall lowering of inventory in the channel." Sharp attributed the majority of new orders to older products, as equipment providers replace their clearing inventory. "It isn't a runaway thing, but it certainly feels good because it's moving in the right direction," he added.

Don't include wireless base station equipment in any sense of minor relief -- carriers still aren't buying equipment to get that food chain moving again. That keeps the TriQuint call from providing the warm fuzzies investors need right now, but there is some comfort in Sharp's affirmation that "almost every customer" of TriQuint's high-profile handset stable, including Nokia(NOK) and Ericsson (ERICY), had a "pickup and resumption of shipments."

Sharp wouldn't call a bottom, despite the numerous attempts from analysts to get him to do so. As the second half of 2001 melts away, the Street is getting increasingly anxious for some signs of wireless recovery. If it's any consolation, TriQuint says it is 100% booked to provide those $80 million in revenues --it was only 85% booked a month ago in its quarterly report -- for solid sequential, if not year-over-year growth.

Small comrade RF Micro Devices (RFMD) forecast 10% revenue improvement going forward in its results for the first fiscal quarter ended June 30. RF Micro announced last month it had a 27.3% sequential uptick to $70.1 million in the first quarter.

Bigger component makers Analog Devices (ADI) and Texas Instruments (TXN) spoil the sense of momentum, however, with their much dimmer forecasts. Analog Devices predicted in its Aug. 17 quarterly results call that it would see a 5% to 10% sequential revenue decline from its third fiscal-quarter return of $480 million. Management threw in the all-too-familiar jokes about demand being so slack that it was doubtful orders could continue to fall off. At the end of July, Texas Instruments cautioned that it expects a 5% to 10% sequential decline in the third quarter after almost a 20% first to second-quarter drop-off.

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