February 9, 2012
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: Shares of wireless chip maker TriQuint Semiconductor (Nasdaq: TQNT ) sank 10% on Thursday after its quarterly results and guidance disappointed Wall Street.
So what: TriQuint's fourth-quarter top and bottom lines actually managed to top estimates, but a sharp drop in gross margins -- 31% versus 36% in the previous quarter -- is triggering fears over the company's long-term profitability. Of course, TriQuint shares have been on fire over the past month, so a bit of a hiccup shouldn't come as a big surprise.
Now what: Management now sees first-quarter adjusted EPS of $0.01-$0.03 on revenue of $210 million-$220 million, versus Wall Street's forecast of adjusted EPS of $0.03 on a top-line of $203.2 million. "As a leader in integrated RF solutions, we have both the products and capacity to deliver on the opportunities in front of us," said CEO Ralph Quinsey. "We see solid prospects for growth in the second half of the year." Given TriQuint's debtless balance sheet and reasonable P/E, it might even be safe enough to bet on that optimism.
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