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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Varian Semiconductor Equipment Associates (Nasdaq: VSEA ) , which makes equipment used in manufacturing computer chips, is soaring as much as 10.8% above last night's closing price in intraday trading.
So what: It's earnings season, and Varian put its very best foot forward in last night's fourth-quarter report. Higher tool sales and unexpectedly fat gross margins conspired to push Varian past management guidance with ease.
Now what: Though unexpected this time, Varian's management expects the higher sales and broader margins to stick into the next quarter. That's a generally positive sign of how the giants of the chip industry view the near and midterm future: Intel (Nasdaq: INTC ) and Taiwan Semiconductor Manufacturing (NYSE: TSM ) wouldn't spend money to upgrade their chip factories if they didn't expect overall demand to rise, after all. Varian's customer list is a veritable who's who of the chip sector, making the company a useful weather vane.
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