Shares of Ciena (NYSE:CIEN) soared as much as 19.2% higher on Thursday morning, sparked by the telecommunications networking equipment maker's strong second-quarter earnings report.
In the second quarter, Ciena's adjusted earnings rose 32% year over year to $0.45 per diluted share, besting Wall Street's consensus estimate by $0.08. On the top line, revenue increased 10% over the year-ago period to land at $707 million, exceeding analyst estimates by $11 million.
Ciena's sales surged 57% higher in the Asia Pacific region and rose 7% in North America, led by strong demand for converged packet optical equipment. These are high-speed connection platforms that connect data centers and connectivity hubs to fiber-optic long-haul links.
Looking ahead, management expects third-quarter sales to land near $725 million, up from $271 million in the same quarter of 2016 and slightly above the Street's current estimates.
Ciena CEO Gary Smith explained that his company exploited a growing competitive advantage amid "positive market dynamics." Reading between the lines, it looks like American and Asian telecoms are getting ready for the next round of large-scale infrastructure upgrades. In short, the fiber-optic networking sector seems due for a large upswing.
This morning's price surge set fresh multiyear highs for Ciena and also pushed other fiber-optic network specialists higher. Some of Ciena's sector peers traded as much as 7% higher on Thursday morning.