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There are some component suppliers that are Apple derivative plays in the true sense of the word, while there are some that are made to look like Apple plays by analysts to garner more hits, even though their relationship with Cupertino is just the tip of a big iceberg. One such company is RF Micro Devices (NASDAQ: RFMD), a maker of radio frequency components that has reinvented itself successfully and counts some of the most well-known smartphone makers on its client list.

If you are still in the dark about RF, now would be a good time to take a look, especially since its third-quarter earnings are just around the corner and the company is expected to deliver terrific results.

3Q Should be a Walk in the Park

RF expects to post revenue of $245 million for the third quarter, while adjusted earnings are expected to come in at 6 cents. The company shouldn’t have much difficulty in breezing past estimates when it reports results next week, since it had blown past the outlook parameters set by analysts last time. As far as the outlook for the ongoing quarter is concerned, there is every possibility that RF won’t disappoint on that front either. Why? Let’s see.

Why Another Stellar Outlook Might be on the Way

As I mentioned, RF Micro boasts the most famous smartphone makers on the planet, starting from heavyweights Apple and Samsung to strugglers Research In Motion (NASDAQ: BBRY), Nokia (NYSE: NOK) and HTC. Samsung is RF’s biggest customer, and accounted for 22% of total revenue in FY12, followed by Nokia at 14%.

More importantly, RF has seen its Samsung account grow from less than 10% in previous years to where it is today, signifying its improving position in the books of the world’s biggest seller of smartphones.  With the Korean giant’s next flagship in the offing, I won’t be surprised if RF calls for another stellar outlook as production for the next Galaxy smartphone ramps up.

But Samsung isn’t the only driver for RF. Old ally Research In Motion could also provide RF’s top line more thrust, since the company is about to launch its highly anticipated BB10 phones later this month. Research In Motion’s hopes of a fightback in the smartphone wars seem to be improving as launch day approaches, and this surely bodes well for RF Micro.

Moreover, the ever-increasing efforts of HTC to reclaim its past glory, through terrific devices such as the Droid DNA or the upcoming M7, is another positive to look forward to. Also, a turnaround in Nokia’s fortunes is another reason for RF investors to celebrate. Nokia recently released preliminary results for the fourth quarter and they were indeed impressive. Its Windows phones are finally showing signs of strength and turned in their best performance in the fourth quarter.

Thus, the company’s presence across both successful smartphones and rising platforms is no doubt a pretty big advantage since it’s well-positioned to gain from the success of all. But there are more drivers for RF Micro Devices in the long run, the most important one coming out of China, the largest mobile market in the world. As Chinese consumers upgrade to faster networks, RF Micro’s prospects brighten since it supplies 3G components to some of the leading handset makers.

The Takeaway

RF Micro Devices has appreciated an impressive 31% over the last three months, and it won’t be surprising if the company’s next earnings report provides further momentum to its shares. Paul Tudor Jones has gone long on RF Micro Devices, and it’s high time you think of doing the same. But, if you want to be more certain about where the company is headed, check back next week for the complete analysis of RF Micro Devices’ third-quarter results.

TechJunk13 has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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