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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: Shares of RF Micro Devices (Nasdaq: RFMD ) were up as much as 19% this morning after the company quarterly results that were much stronger than Wall Street's expectations. The stock held onto gains of about 13% as of this writing. The mobile-chip maker also boosted its guidance for the fourth quarter to levels beyond what analysts had projected.
So what: RF Micro Devices was expected to post $198 in revenue and $0.01 in EPS for its fiscal second quarter, but it blew past those marks with $209.7 million on the top line and adjusted earnings of $0.03 per share. Guidance for the current quarter is now pegged at $245 million in revenue and $0.06 in adjusted EPS, which again exceeds the Street's projections of $219 million and $0.04 in earnings per share.
Now what: RF Micro's conference call offered additional layers of bullishness as well. The company's customer list is growing, its product mix is fleshing out well, and its position in China's exploding 3G mobile market is strong. RF Micro's WiFi offerings were also singled out as a source of strength. This combination of broad-based growth across many product lines and optimistic forward guidance makes RF Micro's future seem bright -- which it will have to be, as the company's GAAP profit and free cash flow had both been gradually declining for some time heading into this quarter.
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