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What: Shares of Applied Micro Circuits (NASDAQ:AMCC) have soared over 14% to a multiyear high today after the company came through with a surprise profit in its fiscal first quarter.

So what: Applied Micro's revenue rose 31% year over year to $54.1 million, which was a hair below Wall Street's $54.2 million consensus. However, $0.02 in adjusted earnings per share proved unexpected, as analysts had been looking for a $0.01 loss per share. GAAP earnings came in even better, with $0.15 per share in earnings coming primarily from some sale adjustments. The company's forward guidance, while not exactly specific on EPS terms, appears to anticipate similar results as were seen this quarter, with slightly higher operating expenses and slightly lower interest expenses, paired with a gross margin that's expected to be about 3% higher than it was in this past quarter.

Now what: Applied Micro remains well below the revenue levels of 2011, which were lower still than pre-financial-crisis revenue levels. Free cash flow, though it's recently ticked up, also remains firmly negative. A surprise profit is always good news, but sustainable profits are far more important. Can Applied Micro manage that? It remains to be seen.

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