What: Shares of semiconductor company Inphi (NASDAQ:IPHI) soared as high as 17.2% on Tuesday after the company reported better-than-expected second-quarter results. Shares closed the trading day up 17%.

Image source: Inphi.

So what: The stock is likely up on Tuesday because of Inphi's higher-than-expected earnings per share and management's decision to raise its guidance for Q3.

For its second quarter, Inphi reported non-GAAP earnings per share of $0.32 on revenue of $60.5 million, up 23% and 22%, respectively, compared to the year-ago quarter. Notably, Inphi's revenue would have been $70.3 million, but it since Inphi announced a plan in June to sell its memory business assets, and closed the sale on August 4, the segment's related results were collapsed and accounted for separately.

Analysts, on average, were expecting Inphi to report EPS and revenue of $0.28 and $69.3 million.

Management said it expects revenue from continuing operations to be up between 10.4% and 13.7% in Q3.

What now: Going forward, management is optimistic about the company's growth opportunities.

"We believe that positive secular trends driving high bandwidth growth in Cloud, Enterprise and Service Provider markets will continue in 2016 and well into 2017," said Inphi CEO Ford Tamer in a press release.

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