Radio frequency semiconductor and systems supplier RF Micro (NASDAQ:RFMD) will report its fiscal 2008 second-quarter earnings after the bell on Tuesday. Never having the patience to sit idly and wait, we'll look ahead and see what's expected.

What analysts say:

  • Buy, sell, or waffle? RF Micro has attracted 20 analysts, with 12 of them giving shares a buy rating, seven saying hold, and one proposing investors sell. RF Micro also holds a four-star stock rating (out of five possible stars) after some 230 players in the Motley Fool CAPS community weighed in with an opinion.
  • Revenues. On average, analysts predict quarterly sales to fall to around $240 million -- more than 2% less than the same quarter last year.
  • Earnings. Profits are expected to drop 36% to $0.07 per share.

What management says:
RF Micro was caught partying with the wrong crowd at the wrong time earlier this year -- when Motorola's (NYSE:MOT) product line fell flat. While the company is still nursing that hangover, management is encouraged by strong orders from other customers, such as Nokia (NYSE:NOK) and Samsung. CEO Bob Bruggeworth claims RF Micro is also benefiting as more high-end devices become the norm: "RFMD expects to increase share and grow dollar content as mobile devices increase in complexity and require additional high-performance RF content." 

What management does:
While the team at RF Micro does a good job managing the volatile wireless handset business, it has been treading water more than advancing. While the operating and net margin numbers show strong increases, this is juiced by a big tax benefit realized last quarter.

Margins 

3/06

6/06

9/06

12/06

3/07

6/07

Gross

34.9%

34.7%

34.5%

34.5%

34.9%

34.5%

Operating

2.5%

4.2%

4.8%

5.8%

7.9%

6.5%

Net

2.1%

3.9%

0.8%

5.2%

8.1%

9.3%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
RF Micro took two big steps toward future growth with the announced acquisition of Sirenza Microdevices (NASDAQ:SMDI) and factory expansion in the last few months. This will help the company meet demand for current products, as well as the increasing adoption of technologies such as WiMax, spurred domestically by the network development of Sprint Nextel (NYSE:S) and Clearwire (NASDAQ:CLWR). Hoping to ride the GPS device wave enjoyed by product makers such as Garmin (NASDAQ:GRMN) and TomTom, the company is also predicting solid reception of its new GPS designs based on early interest from customers.

All this sounds great for the long term, but this Fool would like to see an increase in gross margins in the near term. An uptick on the gross line would validate company projections that more high-end products are succeeding in the market, and put more weight behind management's enthusiasm.

For more Foolish insight:

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Fool contributor Dave Mock owns all his shortcomings, in an "unintended victim" sort of way. He owns shares of Motorola and Garmin. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy can stomach fruitcake.