What happened

Investors in Tower Semiconductor (TSEM -0.64%) are getting a special treat today. The company just missed on Q4 2018 earnings and sales, and issued weak guidance on top of all that -- but the stock is going up anyway.

Shares in Tower Semiconductor -- also known as "TowerJazz" and based in Migdal Haemek, Israel -- are up 13% as of 12:55 p.m. EST.

A semiconductor chip, all lit up

Tower Semiconductor stock is on fire, despite a raft of bad news. Image source: Getty Images.

So what

I can't explain why investors are reacting to the news this way, so let's just run down the numbers.

Tower reported fourth-quarter 2018 sales of $334 million, 1% less than Wall Street expected of it, and 7% below what Tower collected in the fourth quarter of 2017.

Profit for the fiscal fourth quarter was $0.36 per share based on GAAP, and $0.41 per share pro forma -- both short of the $0.42 Wall Street prediction. The GAAP number in particular represented a 74% decline in profit from Q4 of last year.

Check out the latest Tower Semiconductor earnings call transcript.

Now what

On top of all that, Tower issued new guidance for the fiscal first quarter of 2019, predicting it will take in sales of "$310 million, with an upward or downward range of 5%." Since Wall Street analysts are looking for Tower to do more than $313 million in business this quarter, the company's guidance also appears to foreshadow another earnings miss in Q1.

Tower CEO Russell Ellwanger said he was "pleased" with his company's fourth-quarter growth in sequential revenue and margins. But to me, it still looks like bad news all around, and I can't explain why other investors aren't seeing it that way.