Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Power-One (Nasdaq: PWER) beat earnings estimates last night, sending the shares sharply up this morning, then down just as sharply minutes later -- forming a spike sharp enough to give any vampire in your neighborhood a powerful case of heartburn this Halloween weekend.

So what: With Q3 revenues of $314 million, and earnings of $0.40 per share, Power-One easily beat consensus estimates. Even better for the bulls, management forecast fourth-quarter sales to be as much as 21% ahead of estimates on strong demand for solar inverters, with profit margins moving higher.

Now what: I hesitate to call this a "buying opportunity" for one reason only: the obvious "knee-jerk" reaction of the initial stock price jump. Power-One didn't even put out a press release to announce earnings (only filing them with the Securities and Exchange Commission), so it's clear most investors hopped a momentum train before even reading the report.

That said, I have read the report, and here's what it says: Revenues more than tripled, while cost of goods sold rose "only" 140%, and operating costs a bare 28%. Operating margin looks to be about 25.1% so far this year, which beats power equipment peers Emerson Electric (NYSE: EMR) and American Superconductor (Nasdaq: AMSC) -- and is way better than unprofitable Satcon Tech (Nasdaq: SATC). Inventories are up just 62%, so I see no channel stuffing going on here.

With newfound profits that give it a low P/E of 11, everything here looks good to me.

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Emerson Electric is a Motley Fool Income Investor selection, but Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

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