The stock suffered after earnings because management told us that those margins are coming back to the target range again. Fourth-quarter earnings of $0.46 per share and $112 million in sales both beat analyst expectations, and revenue will be strong again in the next quarter.
However, Silicon Labs enjoyed some price breaks from Taiwan Semiconductor Manufacturing
That's why the stock fell more than 7% yesterday. But margin trajectories aside, Silicon Labs claims to have some growth catalysts coming into play; its video products should triple in sales this year. Its new TV tuner chips sell at below-average margins, but have been picked up by several TV manufacturers, paving the way toward strong sales.
That's impressive in the face of established competition from Texas Instruments
Will video-chip sales in 2011 finally provide the catalyst our Stock Advisor team has been expecting for the last six years? Only time will tell, but the early adoption of these tuners is a good sign.
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. Silicon Laboratories is a Motley Fool Stock Advisor choice. The Fool owns shares of Texas Instruments. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.