Why Silicon Laboratories Shares Jumped


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 semiconductor company Silicon Laboratories (NAS: SLAB) jumped as much as 14% today after the company released better-than-expected earnings.

So what: Revenue rose 7.5% from a year ago to $135.7 million, topping estimates of $132.1 million. Earnings per share also beat estimates coming in at $0.51, $0.04 ahead of what the experts expected.

Now what: Guidance was also ahead of expectations, so Silicon Laboratories was hitting on all cylinders today. My only problem with buying today's bump is the relatively slow rate of revenue growth in the quarter. Shares trade at nearly 20 times what analysts expect in earnings during 2012, so the company will have to grow faster than that to live up to those expectations. I like the company's earnings report, but I'd like to wait for a pullback rather than buy on today's bump.

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The article Why Silicon Laboratories Shares Jumped originally appeared on Fool.com.

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.Motley Fool newsletter serviceshave recommended buying shares of Silicon Laboratories. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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