What happened

Shares of semiconductor substrate manufacturer AXT Inc. (NASDAQ:AXTI) jumped on Thursday following the release of the company's second-quarter report. Revenue was ahead of analyst expectations while earnings were in-line, which was enough to send the stock about 9.5% higher by 12:00 p.m. EDT.

So what

AXT reported second-quarter revenue of $23.6 million, up 14.9% year over year and about $1 million higher than the average analyst estimate. AXT CEO Morris Young pointed to record revenue from indium phosphide substrates, as well as improvements in semi-insulating gallium arsenide, semi-conducting gallium arsenide, and germanium substrates, as the main drivers of growth.

A rising stock chart.

Image source: Getty Images.

Earnings came in at $0.05 per share, up from $0.03 per share during the prior-year period and in line with analyst expectations. Higher revenue, a 30-basis-point improvement in gross profit, and a drop in total operating expenses drove the bottom-line increase. Substrate gross margin was higher than the companywide gross margin, offset by a lower gross margin from raw materials.

Now what

Young expects 2017 to end up being a good year for the company, as he stated in the release:

2017 is shaping up to be a solid year of growth for AXT. Across our portfolio, we are seeing emerging technologies and strengthening demand from established applications that are driving growth in each of our substrate product categories. ... Our customer and revenue base continues to diversify, giving us a broad-based opportunity for continued business expansion.

With AXT delivering double-digit revenue growth and solid earnings growth, investors found plenty of reasons to bid up the stock.

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.