Why TriQuint Semiconductor Shares Popped

Is TriQuint's jump meaningful? Or just another movement?

Feb 6, 2014 at 7:28PM

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 thesis.

What: Shares of TriQuint Semiconductor (NASDAQ:TQNT) rose more than 10% during Thursday's intraday trading, then settled to close up around 6% after the company turned in better-than-expected fourth-quarter results.

So what: Quarterly revenue rose 7% year over year to $267.7 million, which translated to adjusted earnings of $0.16 per share. Analysts, on average, were looking for earnings of just $0.13 per share on sales of $265.93 million.

TriQuint also issued first quarter 2014 guidance, calling for revenue between $170 million and $180 million, largely because of "seasonality and a large customer's inventory correction in Mobile Device products." Meanwhile, TriQuint's Q1 adjusted net loss should be between $0.11 per share and $0.13 per share. By contrast, analysts were modeling net income of $0.04 per share on sales $223.61 million.

Nonetheless, thanks to higher gross margin from favorable product mix changes and operational efficiencies, TriQuint insisted that they believe full-year 2014 non-GAAP earnings per share will meet or beat analysts' consensus estimates of $0.49.

Now what: In the end, the combination of that assertion, and TriQuint's strong fourth-quarter results, seemed to be more than enough to appease the market. With shares currently trading at a reasonable 17.4 times this year's estimated earnings, patient long-term investors should stand to be rewarded if TriQuint can indeed deliver on its promise.

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Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of TriQuint Semiconductor. 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.

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