Emulex Shares Popped: What You Need to Know

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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 equipment maker Emulex (NYS: ELX) jumped 14% today after the company announced that fiscal second-quarter results would be better than expected.

So what: The company said revenue would be between $127 million and $128 million, higher than the $124.1 million analysts had expected. Earnings were also strong and should be $0.24 to $0.25 per share, easily surpassing the $0.17 analysts had expected.

Now what: Management expects 2012 to be strong as well, as it benefits from an OEM server platform refresh cycle. If management can keep up this kind of performance, shares might be a steal trading at 11 times forward earnings. I think the momentum can continue with good execution, and shares will continue to rise in 2012.

Interested in more info on Emulex? Add it to your watchlist byclicking here.

At the time this article 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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