Why QLogic Shares Popped
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 network infrastructure specialist QLogic climbed 10% today after its quarterly outlook topped Wall Street estimates.
So what: The stock has been beaten over the past year on worries over slowing server sales, but today's upbeat guidance for the third quarter naturally eases some of those concerns. In fact, management cited rebounding demand across its business for the strong outlook, giving investors some much-needed optimism over a sustained turnaround.
Now what: Management now sees third-quarter EPS of $0.19-$0.20 on revenue of $119 million, up nicely from its prior view of $0.14-$0.19 and $112 million-$118 million, respectively. "The preliminary results were driven by higher-than-expected revenue from Host Products and particularly strong performance from Network Products," QLogic wrote in a statement. More important, with the stock still off more than 40% from its 52-week highs, there's plenty of room left to profit from that operating momentum.
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