Why Intersil Shares Couldn't Hold Their Gains

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 have been shedding gains all day after opening with an 11% jump this morning. Investors got excited about a passable earnings report, but have cooled to the stock after realizing that the upcoming quarter might be weaker than expected.

So what: Intersil's fourth-quarter revenue of $137.5 million fell 17% below the year-ago result, and also slipped slightly below the $138.2 million consensus. Adjusted earnings per share of $0.06 matched the Street's expectations. However, for the upcoming quarter, both revenue and EPS look to be weak. Intersil expects $131 million to $138 million on the top line and $0.02 to $0.05 in EPS, against analyst expectations of $138.6 million and $0.06 per share. The company continues to seek out a new CEO, and offered very tepid analysis of both its past and future quarters.

Now what: Intersil was upgraded to hold status by JPMorgan after the report, which placed a $7 price target on the stock -- a 20% downside. With several sequential declines in the rearview mirror and another looming ahead, the initial reaction seems senseless, and the subsequent sell-off more sensible. There seems little reason to hop aboard this slowly derailing train at the moment.

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The article Why Intersil Shares Couldn't Hold Their Gains originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.The Motley Fool has no position in any of the stocks mentioned. 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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