NEW YORK (TheStreet) -- RF Micro Devices (RFMD) was rising 8.26% to $5.29 on Wednesday after Canaccord reiterated its "buy" rating and increased its target price to $7.25 after the integrated circuits manufacturer released its third-quarter results.
The company reported net profit of $36.4 million, or 13 cents a share, which met analysts' EPS expectations. It also marked an increase from net profit of $21.3 million and earnings of 8 cents a share, in the same period one year earlier. RF Micro Devices reported revenue of $289 million, up from $271 million in the same quarter a year earlier. Analysts had expected revenue of $320 million.
The manufacturer also forecast fourth-quarter guidance and expects revenue to fall in the range of $250 million to $260 million with an EPS of 9 cents to 10 cents a share. That number is below consensus estimates of 11 cents a share.
Despite this, Canaccord raised its target price thanks to RF's gross margin for the quarter.
"While Q4/F'14 sales guidance was well below our and consensus estimates, RFMD guided to a strong 40% gross margin for the quarter," Canaccord's report states. "Given RFMD's strong relationship with Samsung, leading position with the Chinese smartphone OEMs combined with our expectations for RFMD to further grow RF $- content in Apple's next-gen iPhone products, we believe RFMD has now secured strong market share with all the three major constituents of the smartphone ecosystem and is well positioned for continued solid growth trends."
TheStreet Ratings team rates RF MICRO DEVICES INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: