Now that Christmas is out of the way, it's time for that other "most wonderful time of the year" -- year-end earnings season, when companies (whose fiscal years align sensibly with the calendar version) report their Q4 and full-year results. This time around, it's Silicon Labs (NASDAQ:SLAB), which reports on Wednesday.

What analysts say:

  • Buy, sell, or waffle? A lucky 13 analysts follow "Silabs," giving it nine buy ratings, three holds, and a sell.
  • Revenues. On average, they're expecting less than a 1% rise in quarterly revenues to $110.6 million.
  • Earnings. Profits are predicted to fall 42% to $0.18 per share.

What management says:
Just a 1% revenue rise? Not much to get excited about there, eh? Well, yes and no. According to CEO Necip Sayiner, Silabs' "near-term outlook remains relatively muted." However, he does have high hopes for the future. Arguing that the company is "at the beginning of several strong potential product cycles in both our mobile handset and broad-based mixed-signal businesses, Sayiner says he feels "very good about the long-term growth potential and health of the business."

What management does:
And even in the short term, things don't look all that awful. Rolling gross margins have been rising for three quarters straight, operating margins for two, and the net just started trending back upwards last quarter.

Margins

7/05

10/05

12/05

4/06

7/06

9/06

Gross

54.7%

54.4%

54.4%

54.8%

55.6%

55.7%

Operating

23.1%

17.4%

14.3%

11.9%

14.2%

16.8%

Net

15.6%

11.0%

11.2%

9.5%

7.9%

8.9%
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:
Thrice already, Motley Fool Stock Advisor co-analyst Tom Gardner has recommended Silabs to our subscribers -- an honor that precious few of our picks has received, and one that bespeaks great confidence in the firm. But Sayiner's "optimistic caution" seems to have rubbed off on Tom as well.

In Stock Advisor's most recent six-month portfolio review, Tom relegated Silabs stock to his "third team" of equities, which have bright prospects, but aren't quite as cheap as some of his more attractive picks. While the firm has a healthy cash war chest to carry it through the current semiconductor industry downturn, Tom's advice is that investors wait for better prices before buying more Silabs.

So Silabs is stuck in Tom's third team for now. Want to find out what stocks made the first team? Take a free trial subscription to Stock Advisor, and you'll get the whole list.

Competitors:

  • Agere (NYSE:AGR)
  • Broadcom (NASDAQ:BRCM)
  • Infineon (NYSE:IFX)
  • Philips Electronics (NYSE:PHG)
  • RF Micro Devices (NASDAQ:RFMD)
  • Texas Instruments (NYSE:TXN)

Fool contributor Rich Smith does not own shares of any company named above.