Intersil Options Soar Ahead of Earnings

Intersil Corporation [[ISIL]] options trading was off the charts Tuesday ahead of the semiconductor industry’s earnings season. The company saw 4,609 call option contracts trade hands, which is 15x its normal volume of 304 contracts. The majority of the volume was seen at the $7.50 and $10 strike prices for the February and April 2009 call option contracts.

Rival Intel Corporation [[INTC]] took the rare step of revising its fourth quarter sales guidance twice due to deteriorating market conditions ahead of its earnings announcement on Thursday. The firm, along with others in the industry, has been devastated by a slowdown in consumer demand for personal electronics as well as corporate demand for new technologies using semiconductors.

Intersil has reported solid earnings for the past three years, but analysts only expect the company to earn $0.09 cents per share on average in the fourth quarter. The estimates vary substantially, however, with the low estimates being for -$0.01 cents and the high estimates set at $0.11 cents per share. The firm has historically announced its fourth quarter results between January 23rd and 25th.

The recent options activity suggests that many investors are bullish on the prospects for the semiconductor firm over the next few months. However, the earnings at Intel and other semiconductor firms may provide additional guidance as to what investors should expect. These rival reports have also impacted the stock itself in anticipation of its results. So, investors must wait and see…