Silicon Laboratories Shares Plunged: 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: Silicon Laboratories (Nasdaq: SLAB  ) dropped 14% in intraday trading today after it beat earnings expectations but issued disappointing guidance.

So what: Non-GAAP EPS of $0.48 beat the $0.46 consensus estimate but fell 33% year over year. Revenue of $126 million missed the consensus forecast of $127 million and declined 6% year over year.

Now what: The CEO said, "The business is ready to sprint ahead on the legs of very strong products and share gains" but is "facing weakening end-user demand in several of our markets." How did Silicon Labs reconcile the strong and weak comments? Management guided third-quarter revenue to a decline of 5% to 10% sequentially, which is flat to down 6% year over year.

Interested in more info on Silicon Labs? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. 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.


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  • Report this Comment On July 25, 2011, at 5:34 PM, CAJCFA wrote:

    Correction: The last line in the second paragraph should have read, "Revenue of $126 million missed the consensus forecast of $127 million and declined 6% year over year."

  • Report this Comment On July 26, 2011, at 9:29 AM, TMFKris wrote:

    And it's been corrected!

    TMFKris -- Motley Fool copy editor

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