Why Freescale Semiconductor, Ltd. Shares Soared

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 Freescale Semiconductor, Ltd. (NYSE: FSL  ) popped nearly 15% Wednesday after the company's fourth quarter results and forward guidance both exceeded Wall Street's expectations.

So what: Quarterly sales came in at $1.08 billion, which translated to adjusted earnings per share of $0.45. By comparison, analysts were looking for adjusted earnings of only $0.18 per share on sales of $1.05 billion.

In addition, Freescale projects current quarter sales between $1.07 billion and $1.11 billion, compared with estimates for sales of just $1.03 billion.

Now what: Freescale also notes that gross margin in Q1 is expected to increase by roughly 50 to 75 basis points over last quarter's 42.7% -- a great thing, considering the company actually turned in a net loss of $0.46 per share in Q4 in accordance with generally accepted accounting standards.

To be sure, CEO Gregg Lowe assured investors while Freescale made progress in growing market share across each of its five product groups, "there is a lot more to do and the Freescale team is focused on driving continued improvements in market share and margin."

With shares currently trading at less than 1 time sales and around 10 times next year's estimated earnings, I think the stock could still prove a bargain for patient investors as long as Freescale can continue marching toward sustained profitability over the long term.

Consider the 9 solid high-yielding stocks in this free report
Alternatively, you could rest a little easier by investing in the stocks of solidly profitable dividend payers.

In fact, one of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend-paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


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: 2815834, ~/Articles/ArticleHandler.aspx, 10/22/2014 1:07:43 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...


Advertisement