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 Ultratech, (NASDAQ:UTEK) jumped more than 10% during intraday trading Thursday after the company released disappointing fourth-quarter results, but followed with encouraging forward guidance.
So what: Quarterly sales plunged more than 63% year over year, to $24 million, which translated to a net loss of $0.73 per share. Analysts, on average, were modeling a Q4 loss of $0.31 per share on sales of $28.05 million.
During the subsequent earnings conference call, however, management raised the company's 2014 full-year 2014 guidance, saying revenue could increase 25% to 30% over 2013, with each quarter seeing sequential growth. Specifically, that results in a range of approximately $196.6 million to $204.5 million, which is well ahead of analysts' expectations for 2014 sales of $193.5 million.
In addition, Ultratech's cash flow in 2014 is expected to be positive, and gross margin should improve sequentially each quarter to average around 40% for the year.
Now what: Ultratech's guidance was good, and the company does have $297 million in cash on its balance sheet to tide it over. But I'm still hesitant to step in given the risk of last quarter's painful results carrying forward. Until Ultratech shows more evidence its business will indeed improve as management is promising, I'm perfectly happy remaining on the sidelines. Consider the compelling tech stock in this free report
If Ultratech's too risky, but you'd still like a stock with huge potential, you're in luck! If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold during the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.
Consider the compelling tech stock in this free report
Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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.