Zacks Investment Research upgraded Fairchild Semiconductor International Inc. (FCS) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #2 (Buy) on Aug 2. This was primarily due to upward estimate revisions in response to robust second-quarter 2014 results announced on Jul 17.
Why the Upgrade?
The semiconductor stock reported second-quarter adjusted earnings of 20 cents per share, up 400% year over and year and significantly ahead of the Zacks Consensus Estimate of 11 cents per share. Strong revenues, higher utilization and an improved product mix contributed to the earnings beat.
Fairchild Semiconductor saw healthy year-over-year growth in sales, driven by superior execution and broad-based demand strength. Results benefited from strong demand across most end markets, especially for mobile and automotive segments.
Moreover, Fairchild Semiconductor is set to explore the lucrative 3D motion tracking market with its recent acquisition of Xsens, a Netherlands-based global supplier of 3D motion tracking products for the industrial, health, fitness and entertainment markets.
Looking ahead, the company anticipates continued revenue growth in its automotive and mobile segments, while its industrial segment is expected to gain more traction in the coming quarters. The company’s mobile market too looks forward to benefit from the new product introductions by Apple Inc. (AAPL).
Fairchild Semiconductor has witnessed five upward estimate revisions for the current quarter and seven for the current year in the past month. The Zacks Consensus Estimate for third-quarter 2014 has increased to 21 cents per share from 17 cents during this period, while for full-year 2014, it rose to 64 cents per share from 50 cents.
Other Stocks to Consider
Other notable stocks in the semiconductor industry include Analog Devices, Inc. (ADI) and Microsemi Corp. (MSCC), each carrying a Zacks Rank #2.
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