Please ensure Javascript is enabled for purposes of website accessibility

Why Oclaro Inc. Stock Popped Today

By Steve Symington - Updated Feb 6, 2018 at 4:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The optical communications solutions leader delivered a strong quarter.

What happened

Shares of Oclaro Inc. (OCLR) climbed 20.9% on Tuesday, after the optical communications specialist announced stronger-than-expected fiscal second-quarter 2018 earnings.

More specifically, Oclaro's quarterly revenue declined 9.5% year over year to $139.3 million, in line with the company's expectations. On the bottom line, that translated to adjusted earnings of $23.1 million, or $0.14 per diluted share. That's down from $36.3 million, or $0.21 per share, in the same year-ago period, but above the $0.12 per share investors were expecting. 

Fiber optic cables with blue and green lights shining through them

IMAGE SOURCE: GETTY IMAGES.

So what

Oclaro CEO Greg Dougherty noted that while revenue declined, the company enjoyed "strong" profitability and cash flow during the quarter.

"While we project March quarter revenue to be down sequentially, we anticipate another quarter of solid operating income," Dougherty added. "As the headwinds facing the industry begin to subside, and we ramp new products, our revenue is expected to resume growth in the June quarter."

Now what

For the quarter ending March 31, Oclaro expects revenue to be in the range of $120 million to $128 million, which technically stands below consensus estimates for sales of $132.8 million.

But it's also worth noting that shares of Oclaro had fallen nearly 40% over the past year leading up to this report. And it's no surprise to see the market so aggressively bidding shares up, with management calling for the optical industry to effectively turn for the better before the end of the first half of 2018. If that turn is effectively the start of a longer-term trend, today's gains could be just the beginning for patient Oclaro investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Oclaro, Inc. Stock Quote
Oclaro, Inc.
OCLR

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.