Updated from 4:35 p.m. EDTSAN FRANCISCO -- RF Micro Devices ( RFMD) beat Wall Street's financial expectations in its fiscal second quarter, thanks to strong demand in the wireless phone market. But the company warned that its manufacturing operations are having trouble keeping up with the strong demand, putting a dent in profit margins in the current quarter. The news sent shares of RFMD skidding 6.2%, or 45 cents, at $6.23 in extended trading Tuesday. In a post-earnings conference call Tuesday, RFMD officials explained that the maker of cell-phone radio frequency and transceiver chips has been hit with a double-whammy. Its new Polaris 3 chip, which began volume production in its fiscal second quarter, is off to a shaky start. Demand for the chip is stronger than expected, but yields of the chip are too low, a problem RFMD blamed on a bum crop of raw material from one its suppliers. Meanwhile, strong demand for RFMD's transmit modules is outpacing manufacturing capacity, forcing the company to outsource some production. An increase in the price of the raw material used to manufacture the modules is further driving up costs. The upshot is that RFMD's profit margins will suffer in the current fiscal third quarter. While the company did not specify how large of a toll the various problems would take on the gross margin, CIBC World Markets analyst Ittai Kidron said he believed most people would model a 1% reduction in fourth-quarter gross margin.