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The good news is flowin for Rubicon Technology (RBCN), but traders aren’t impressed enough to continue to send the stock into the stratosphere l.. at least in the early going. The stock is down a few percent as I write this (Thursday after market close). The company beat analyst estimates by reporting a Q2 EPS of $0.18, vs the estimate of $0.14 on revenues of $15.8 million vs the estimate of $14.50 million. Sequentially, that’s a 157% bump in EPS and a 37% bump in revenues. Quarter over quarter, it’s a much bigger improvement considering the company reported a loss of .15/share in the year ago quarter on revenues of just $3.2 million. Not too surprising is a bump in margins as well. The company increased gross margins to 46% from 36% in the prior quarter. Clearly, a whopper of a quarter out of RBCN, but this is a stock that has come a LONG way, so traders may be “selling the news”.

Looking ahead to next quarter, the company sees pricing getting even better and is estimating revenue at $19.5 million and EPS at .28/share vs the analyst estimates of $17.9 million and .19/share respectively. Margins are expected to improve again to the low 50s range.

To top it off, Rubicon has announced it has won a supply agreement with a major LED chip manufacturer to provide 6 inch polished substrates from Nov 2010 to Dec 2011. The value of the contract is $71 million which is around what they are likely to generate for the entire year in 2010, so a significant deal.

Even with the run RBCN has had, I’m a bit surprised it’s not seeing some upside action after hours. Technically, it is a bit shaky up here having taken out key support of the 50 day moving average in Thursday’s regular session.

Disclosure: No position

Source: Rubicon Has Come a Long Way: Where to Next?