RF Micro Fights Off Rumor

Handset component supplier RF Micro Devices ( RFMD) was blindsided this morning by trading-floor rumors that it had lost orders from its major client, Nokia ( NOK), to competitor TriQuint Semiconductor ( TQNT).

The rumor dragged RF Micro shares down more than 10% at its nadir despite a strong market rally that lifted nearly the entire wireless sector. TriQuint shares were up nearly 8% during a frenzied trading session.

Only it wasn't true, say executives of both RF Micro and Nokia: "The rumors are totally unsubstantiated," said RF Micro spokesman Doug DeLieto. "We're looking into the sources of the rumors and intend to turn those individuals and information over to the authorities." DeLieto said the company is passing along information from its internal investigations to the National Association of Securities Dealers.

Nokia accounts for about 65% of RF Micro's revenue. A Nokia spokesman, contacted Thursday, said the RF Micro rumor "was just that. A rumor."

J.P. Morgan wireless-equipment analyst Ed Snyder also said the rumor was not true.

Despite vigorous on-the-record denials by company officials, RF Micro shares finished the day down 43 cents, or 4.9%, to $8.27. TriQuint shares gave back some of its intra-day gains, settling up 3 cents, or 0.5%, to $6.03.

DeLieto said RF Micro maintains its fiscal second-quarter guidance of earnings per share of 1 cent to 2 cents, and sales growth of 5% to 10% from its first-quarter figures, or $109 million to $114.25 million.

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