Analysts were expecting Diodes Incorporated (DIOD) [Chart - News - Analysis] to report earnings of $0.19 for last quarter, but DIOD beat expectations with actual earnings of $0.21---2 cents above the consensus estimate. DIOD also issued earnings guidance for next quarter that is above current analyst expectations.

If you compare last quarter's earnings to the $0.29 the company made per share during the same quarter a year ago, you can see that DIOD’s earnings are down this year.

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Also, if you compare DIOD's 17.07% projected earnings-per-share (EPS) growth rate for the next five years with the projected EPS growth rate of 14.85% for the Semiconductor - Integrated Circuits industry as a whole during that same time frame, you can see that analysts expect DIOD to outperform the industry in the future---which is a good sign for the stock.

Drilling down a little deeper into the Semiconductor - Integrated Circuits industry, you can see how analysts believe DIOD will stack up against some of the other stocks in the industry, like PMC-Sierra Inc. (PMCS) [Chart - News - Analysis] and MEMC Electronic Materials Inc. (WFR) [Chart - News - Analysis], in the future. Analysts believe PMCS's earnings are going to grow at a rate of 10.00% while WFR's earnings are going to grow at a rate of 15.29%.

Earnings season can be a volatile time in the stock market. Check out these videos and articles to be better prepared to take advantage of the large price moves that tend to accompany earnings announcements.

- Earnings Season is Here - Find Out How to Trade It

- Using Options to Trade Earnings

- Understanding Stock Analyst Research and Recommendations

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Roth Capital gave the Semiconductor - Integrated Circuits industry some bad news as it announced a downgrade on one of its stocks.

Marvell Technology Group Ltd. (MRVL) [Chart - News - Analysis] was downgraded from Buy » Hold on 10/28/2009---a negative sign for the stock that investors will have to endure. FYI, Roth Capital uses the following rating scale when analyzing stocks: Strong Buy, Buy, Neutral, Hold, Sell.

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Marvell Technology Group Ltd. has an average analyst recommendation score of 1.9 and competes for investment dollars with PMC-Sierra Inc. (PMCS) [Chart - News - Analysis] and Skyworks Solutions Inc. (SWKS) [Chart - News - Analysis]---two other stocks in the Semiconductor - Integrated Circuits industry that have average analyst recommendation scores of 2.4 and 1.9 respectively.

Analyst recommendations are averaged and scored using the following rating scale:

- 1.0 = Strong Buy

- 2.0 = Buy

- 3.0 = Hold

- 4.0 = Sell

- 5.0 = Strong Sell

Why are Upgrades and Initiations Good and Downgrades Bad?

One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.

Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.

Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.

What is a Stock Analyst?

Check out the Understanding Stock Analyst Research and Recommendations video and article for more info.

A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.

Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.

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Analysts were expecting PLX Technology Inc. (PLXT) [Chart - News - Analysis] to report earnings of $-0.07 for last quarter, but PLXT beat expectations with actual earnings of $-0.05---2 cents above the consensus estimate. PLXT also issued earnings guidance for next quarter that is in line with current analyst expectations.

If you compare last quarter's earnings to the $0.03 the company made per share during the same quarter a year ago, you can see that PLXT’s earnings are down this year.

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Also, if you compare PLXT's 20.00% projected earnings-per-share (EPS) growth rate for the next five years with the projected EPS growth rate of 14.88% for the Semiconductor - Integrated Circuits industry as a whole during that same time frame, you can see that analysts expect PLXT to outperform the industry in the future---which is a good sign for the stock.

Drilling down a little deeper into the Semiconductor - Integrated Circuits industry, you can see how analysts believe PLXT will stack up against some of the other stocks in the industry, like Atheros Communications Inc. (ATHR) [Chart - News - Analysis] and PMC-Sierra Inc. (PMCS) [Chart - News - Analysis], in the future. Analysts believe ATHR's earnings are going to grow at a rate of 18.88% while PMCS's earnings are going to grow at a rate of 10.00%.

Earnings season can be a volatile time in the stock market. Check out these videos and articles to be better prepared to take advantage of the large price moves that tend to accompany earnings announcements.

- Earnings Season is Here - Find Out How to Trade It

- Using Options to Trade Earnings

- Understanding Stock Analyst Research and Recommendations

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