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's happening?
Shares of Silicon Laboratories (SLAB 3.90%) jumped as much as 9.8% this morning after the company announced better-than-expected fourth-quarter results and an acquisition.
Why it's happening
Quarterly revenue rose 10.7% year over year, to $162 million, which translated to adjusted earnings of $0.57 per diluted share. Analysts, on average, were looking for earnings of just $0.47 per share on sales of $157.9 million.
In addition, for the current quarter, Silicon Laboratories expects revenue of $156 million to $162 million, and adjusted earnings per share between $0.42 and $0.48. Wall Street was modeling earnings and revenue of $0.44 per share and $154.3 million, respectively.
Finally, Silicon Labs announced it has acquired privately held, Finland-based Bluegiga Technologies Oy for $61 million in cash. Bluegiga Technologies is expected to contribute $25 million to $28 million in revenue this year, and should be accretive to adjusted earnings.
More importantly, however, its portfolio includes ultra-low-power Bluetooth and Wi-Fi modules, software stacks, development tools, and software development kits aimed at a broad range of applications including industrial automation, consumer electronics, audio, automotive, retail, residential, and health and fitness. This should enable the combined companies to become a "one-stop shop" for standards-based wireless connectivity solutions, and further Silicon Labs' goal of capitalizing on the Internet of Things.
