What happened

Shares of FormFactor (NASDAQ:FORM) rose 34.7% higher in November of 2018, according to data from S&P Global Market Intelligence. The maker of testing equipment used in the production of semiconductors published a strong third-quarter report at the start of the month and never looked back.

So what

FormFactor's third-quarter sales fell 6% year over year to $135 million, while adjusted earnings declined 24% to $0.26 per share. If that sounds weak, consider that your average analyst had been expecting earnings of $0.23 per share on roughly $133 million in top-line sales. Furthermore, FormFactor's fourth-quarter guidance was more optimistic across the board than the reigning analyst forecasts.

After posting this report on the evening of October 31, FormFactor's shares rose more than 23% the next day.

A technician in clean-room mask and goggles holds up a computer chip for a visual inspection.

Image source: Getty Images.

Now what

After a couple of years with steady growth, the semiconductor sector largely took a break in 2018. Last year's cryptocurrency craze faded fast, and trade tensions with China made for unpredictable order volumes from usual end markets. So, it's not surprising to see FormFactor suffering slow orders of its own, but the sector as a whole should at least start to recover in 2019. This stock should follow suit.