Why TriQuint's Shares Sank

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 TriQuint Semiconductor (Nasdaq: TQNT  ) are down nearly 12% today after a mixed earnings report, which presented earnings per share ahead of the analyst consensus, but balanced that positive note with an underwhelming forward earnings estimate.

So what: TriQuint's adjusted earnings per share came in at $0.02, which easily beat expectations that the company's earnings would break even. However, the fourth quarter is now expected to see EPS in the $0.01 to $0.03 range, significantly lower than the analyst consensus of $0.06. Fourth-quarter revenue projections, at $220 million to $225 million, are higher than the $220.3 million consensus estimate, but the bottom line is what really counts.

Now what: Analysts at Lazard Capital downgraded TriQuint to a hold from its earlier buy rating as a result of the poor guidance. TriQuint's P/E ratio is still near its all-time highs after the drop, and that valuation should wind up going negative after financial sites input the newest numbers, considering that GAAP earnings showed a loss of $11.2 million for the third quarter. TriQuint's had a difficult time maintaining its momentum since net income peaked early in 2011, and with underwhelming earnings ahead, there's little reason to expect this situation to reverse in the near future.

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