Oclaro Logo Color

Image source: Oclaro.

What happened

Shares of optical communications solutions provider Oclaro (NASDAQ:OCLR) surged on Thursday after the company released preliminary second-quarter results. Revenue is expected to come in at the high end of Oclaro's previous guidance range, while both gross margin and operating income are expected to exceed guidance. At 11 a.m. EST, the stock was up about 14%.

So what

Oclaro expects second-quarter revenue to be in the range of $153.5 million to $154.0 million, at the high end of the company's previous guidance range of $146 million to $154 million. CEO Greg Dougherty pointed to strong execution, a richer product mix, and favorable foreign exchange rates as drivers behind the company's performance.

A GAAP gross margin of 39.5% and a non-GAAP gross margin of 40% are now expected, compared to previous non-GAAP gross margin guidance of 33% to 36%. Operating income is expected to be $33 million and $36 million on a GAAP and non-GAAP basis, respectively, compared to guidance for non-GAAP operating income of $22 million to $26 million.

Now what

"Our excellent preliminary results for the December quarter once again demonstrated the strength of Oclaro's products in the markets we serve," said Dougherty. "We expect revenue to come in at the high end of guidance as 100G and beyond sales again exhibited excellent growth. In addition, we expect the quarterly results to reflect record levels of gross margin and operating income and exceed our prior guidance."

Oclaro will report its full second-quarter results on Jan. 31, with a conference call to follow.

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.