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What: Shares of Standard Microsystems (Nasdaq: SMSC) have rallied by as much as 17% after the company reported earnings yesterday.

So what: SMSC surprised investors and the Street with an adjusted fourth-quarter profit of a nickel per share, much better than the $0.17 per share loss that analysts were expecting. That made up for the fact that revenue came in a little light at $89.9 million, below the consensus estimate of $91.1 million.

Now what: CEO Christine King noted that the company's consumer electronics and automotive markets both generated double-digit annual growth and that SMSC has been focusing on cost reductions. For next year, the company is predicted a profit of $0.29 to $0.38 per share on revenue in the range of $98 million to $102 million. Both of those guidance ranges handily top what the Street was looking for.

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