What happened

Shares of FormFactor (NASDAQ:FORM), a maker of testing equipment used in the manufacturing of semiconductors, jumped 14% as of 11:40 a.m. EDT Thursday. Investors can credit the double-digit gain to the release of the second-quarter financial report that featured better-than-expected results.

So what

Here's a look at the key numbers from the period:

  • Revenue was $135.5 million. While this was down about 6% from the year-ago period, it was ahead of the $134.5 million in revenue that traders were expecting.
  • Non-GAAP earnings per share were $0.27 per share. This figure also compared favorably to the $0.24 in EPS that Wall Street had modeled.
A person in a head-to-toe protective suit is holding a semiconductor.

Image source: Getty Images.

Turning to guidance, management projected that revenue in the upcoming quarter will land between $130 million and $138 million. This range falls short of the $141.7 million in revenue that market watchers were predicting.

Net income per share is expected to come in between $0.20 and $0.26. This number is also a bit shy of the $0.29 in EPS that was expected.

Traders appear to be looking past the weak guidance and instead are focusing their attention on the upbeat second-quarter results.

Now what

On the conference call with investors, FormFactor highlighted a handful of customer delays that are responsible for the year-over-year decline in sales. In response to the delays, CEO Michael Slessors said, "It is unlikely that 2018 will be a growth year."

Overall, FormFactor shared disappointing guidance and reversed its prior comments that called for sales to increase in 2018. That has me scratching my head as to why shares are trading higher today.

Traders might be excited by the estimate-topping results, but I have a hard time getting excited by year-over-year declines in sales. For that reason, I'm content to look elsewhere for more promising investment opportunities.