Monolithic Power Systems Shares Popped: What You Need to Know

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 Monolithic Power Systems (NAS: MPWR) jumped as much as 15% early in trading after the company released earnings.

So what: During the fourth quarter, revenue declined 10.4% from last year to $47.5 million. Non-GAAP net income was $5.2 million, or $0.15 per share, topping the $0.11 in earnings analysts had expected. GAAP net income was $2.5 million, or $0.07 per share.

Now what: The company is hoping to return to growth in 2012 after a transition plan was executed in 2011. If the company can return to growth, shares may be worth looking at again. For now, I can't pay a forward earnings multiple of 17 for a company whose revenue is declining even after beating analysts' expectations today.

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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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. The Motley Fool has a disclosure policy.

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