Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Monolithic Power Systems Shares Popped: What You Need to Know

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: Just one quarter after thoroughly disappointing analysts, shares of Monolithic Power Systems (Nasdaq: MPWR  ) surged as much as 12% on better-than-expected earnings.  

So what: Profit checked in $0.18 per share on a Non-GAAP basis, $0.04 better than the consensus estimate, according to Yahoo! Finance. Management also announced a $20 million increase in its active stock repurchase program.

Now what: Buybacks have had the desired effect. Diluted shares outstanding dipped to 36.7 million in Q4, from 37.4 million the prior-year quarter, adding needed juice to the bottom line. Future repurchases will be paid from Monolithic’s war chest, which included $177 million in cash and short-term investments as of Dec. 31.

That’s the good news. The bad is that Monolithic Power has experienced a massive dropoff in revenue growth, which hasn’t yet tarnished direct competitors Analog Devices (NYSE: ADI  ) and Texas Instruments (NYSE: TXN  ) . Revenue growth will have to return for investors to realize healthy returns from here.

Interested in more info on Monolithic Power Systems? Add it to your watchlist. You can also try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. 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 owns shares of Texas Instruments and is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1436175, ~/Articles/ArticleHandler.aspx, 4/1/2015 9:33:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!