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RF Micro Meets Third-Quarter Number

But the equipment maker lowers its earnings and revenue guidance.

While skirting a worst-case scenario for its third quarter,

RF Micro Devices

(RFMD)

couldn't avoid disappointing Wall Street as it looked ahead to its fourth.

RF Micro posted $100.6 million in third-quarter revenues, good for a 2-cent-per-share profit, matching estimates. But for the current period, the company said that on the basis of its current backlog of orders, it expects to earn 1 cent a share on revenues of $90 million to $95 million.

Analysts were expecting earnings in the current quarter of 4 cents a share and revenues of just over $100 million, according to First Call.

RF Micro's third-quarter revenues grew 2.7% from the previous quarter's $98 million, and jumped 29% from the $78 million amassed during the third quarter a year earlier. But the per-share profit was less than half the year-earlier's 5 cents. Profit margins increased by 170 basis points vs. the company's fiscal second quarter, to 38.7%.

Looking at fiscal 2002, RF said it expects its revenue growth to exceed growth in the handset market in 2002 as it grabs market share, expands into high-growth areas outside the handset market and adds customers.

The wireless market has been dragged down in the past two weeks by poor data points from

Radio Shack

(RSH)

,

Sprint PCS

(PCS)

and

Verizon

(VZ) - Get Report

, and at least three high-profile wireless-sector downgrades from Wall Street banks.

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And last month, RF Micro rival

Triquint

(TQNT)

, which doesn't report until Feb. 7, warned that it didn't expect to make its revenue targets.

But RF Micro reassured investors repeatedly this month that it would meet its targets. On Jan. 4 it reiterated that it would earn 1 to 2 cents a share in profit and reap between $99 million to $103 million in sales in the December quarter. On Jan. 10 it promised it would be profitable and announced it had signed up a new customer, which it would only describe as a top-tier mobile phone maker.

Nokia

(NOK) - Get Report

is RF Micro's largest customer, followed by

Motorola

(MOT)

. Others key customers include Germany's

Siemens

(SI) - Get Report

and Korea's

Samsung

.

Last quarter the company surprised analysts with a penny profit, down from 10 cents a year earlier. Analysts had estimated that the company would not produce black ink until this quarter. The company lost $33.5 million in its first quarter. "We saw quite a bit of pickup during the

second quarter, which allowed us to return to profitability sooner than anticipated," CFO Dean Priddy told Reuters in October.