GREENSBORO, N.C.—Those pesky, detail-oriented analysts and emotional stock traders sent ripples through the market yesterday and today as news circulated that RF Micro Devices Inc.’s two largest customers—Nokia Corp. and Motorola Inc., which happen to be the two largest handset vendors in the world—may have cancelled sizeable orders to the Greensboro, N.C.-based chip maker.
RF Micro Devices did not immediately comment on the news.
ThinkEquity Partners L.L.C.’s Mike Burton wrote yesterday that RF Micro Device’s two top customers reportedly cancelled orders representing about six million to seven million units, which Burton said could impact the chip-maker’s financial results in the second half of the year. Burton also said his firm is concerned about a possible build-up of low-end handsets in the channel, as well as a component build-up, which could impact chip-makers in the fourth quarter.
RF Micro Devices’ stock slid on the news, trading at $5.63 per share; its 52-week range is $4.81 to $9.58. The stock also got pushed down, apparently, as J.P. Morgan analyst Christopher Danely reported yesterday that Nokia was pushing out orders for components, either from weaker-than-anticipated demand or over-build in inventory.
Ironically, just a week ago, Credit Suisse analyst Jeff Loff lifted his rating on RF Micro Devices’ stock to “neutral” from “underperform,” based on Nokia and Motorola’s strengths in retail sales. Loff’s perspective lifted RF Micro Devices’ stock 2.3 percent to $6.27 on June 21.
Meanwhile, Nokia’s stock rebounded today after sliding in early trading; it regained a percentage point to trade at $19.35 at mid-day.
