Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service today.
"Fly, brother, fly! more high, more high!
Or we shall be belated:
For slow and slow that ship will go,
When the Mariner's trance is abated."
-- From "The Rime of the Ancient Mariner," by Samuel Taylor Coleridge, 1798
That's what happened to Fairchild Semiconductor International (NYSE: FCS ) today. Fellow chip producer (silicon, not potato) Intel (Nasdaq: INTC ) reported stellar earnings Tuesday night, sending every chip stock under the sun into a ballistic trajectory. Great tidings from the sector-defining business must be good news for everybody, right? Advanced Micro Devices (NYSE: AMD ) gained 3.6% on Intel's report, ON Semiconductor (Nasdaq: ONNN ) added 4.5%, and Texas Instruments (NYSE: TXN ) tacked on 4% in one day. Fairchild's stock price skyrocketed by 8.3% on Wednesday, on the eve of its own earnings report.
So when Fairchild's numbers turned out to beat analyst estimates by a slim margin, it wasn't enough to support the high expectations Intel had worked up for its sector buddy. First-quarter sales came in at $378 million, feeding into $0.25 of pro forma earnings per share -- drastic improvements over the first quarter of 2009 and impressive lifts from last quarter as well. But the stock sits 2.5% below last night's closing price, taking some wind out of Fairchild's billowing sails.
Fairchild is still on a hot streak, even after a small tweak here at the end. The stock has bounced over 330% above last year's lows and is sniffing on price levels not seen since the summer of 2008. Strong sales across all end markets, the highest gross margins since 2000, and a positive net cash balance all point to strong business that indeed does follow Intel's inspiring lead.
I see no reason why Fairchild wouldn't keep sailing along on rising demand for power-control chips, which is what the company does best -- so I'm heading over to CAPS to give the stock a thumbs-up rating for the next year or so. Feel free to join me there and share your insights about Fairchild -- and 5,000 other stocks.