Vicor (VICR 19.15%) stock is seeing explosive gains in Friday's trading. The power-module specialist's share price was up 18.6% as of 2:40 p.m. ET despite the S&P 500 index being off 1.7% and the Nasdaq Composite being down 2.2% at the same point in time. The stock had been up as much 26.3% earlier in the day's trading.

Vicor released its fourth-quarter report after the market closed yesterday and published sales and earnings for the period that came in much better than Wall Street had expected. Even better, the company indicated that it expected to make continued progress toward reaching its long-term performance targets.

Vicor stock surges on strong Q4 numbers

Vicor reported earnings per share of $0.23 on sales of $96.2 million in the fourth quarter, handily topping the average Wall Street analyst call for per-share earnings of $0.14 on sales of roughly $91 million.

While analysts had broadly expected the business to post a modest sales decline in the quarter, Vicor's revenue in the period actually improved by 3.8% compared to the prior-year period. Gross margins also improved in the quarter, paving the way for a 21% year-over-year increase for earnings per share and big profit beat relative to expectations. The business posted a gross margin of 52.4% in Q4, up from 49.1% in the third quarter, with gains driven by supply chain efficiencies and a greater sales contribution from royalties.

What's next for Vicor?

While management didn't issue guidance for the first quarter, Vicor is looking to greater utilization of its chip fabrication plant and increased licensing revenue as catalysts that could push its margins higher. The company indicated that there were too many uncertainties on the horizon to break out detailed guidance, but it expects that the business will continue to make progress this year toward its goal of reaching $1 billion in annual revenue and a gross margin of 65%.