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: Shares of Intersil (NASDAQ:ISIL) started the day with a 14% pop after the company bested earnings expectations and delivered positive guidance yesterday afternoon. Shares still cling to an 8% gain as of this writing. Let's take a look at what's behind these gains.

So what: Intersil's second-quarter earnings, although 11% lower year over year, were still good enough at $144.8 million to trounce the $138.4 million consensus. Adjusted earnings of $0.14 per share really got investors excited -- the Street only expected EPS of $0.06.

Looking ahead, Intersil now expects $0.15 to $0.18 in earnings per share for the third quarter, which at the high end is double Wall Street's $0.09 consensus. Revenue guidance in the $146 million to $152 million range also comes in ahead of the $141.6 million consensus.

Now what: There's a lot of optimism today for a stock that had previously been flat for a year, and which has not been profitable on a GAAP basis since the latter days of the financial crisis. Intersil's free cash flow has also fallen precipitously, and although this quarter saw that number move strongly in the right direction, the company's price-to-free-cash-flow ratio is still near 30. That's perfectly acceptable if you expect strong growth ahead, as Needham now does (the firm upgraded Intersil to a buy after earnings), but most analysts continue to rate the stock as either a hold or a sell. It's not exactly a ringing endorsement for this up-and-down underperformer.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.