What happened

Shares of Oclaro (NASDAQ:OCLR) gained 20.7% in February of 2018, according to data from S&P Global Market Intelligence. After a difficult 2017, the maker of optical networking components headed into last month's second-quarter report with low expectations -- and the results ended up impressing Oclaro's investors.

So what

Essentially all of Oclaro's February gains materialized as a direct response to that second-quarter earnings report in the first week. Top-line sales fell 9.5% year over year to $193 million, on par with Oclaro's own guidance. Adjusted earnings declined from $0.21 to $0.14 per diluted share, but your average analyst would have settled for $0.12 per share.

Close-up view of a bundle of optical network fibers.

Image source: Getty Images.

Now what

The company is ramping up production of new, faster fiber-optic modules at an opportune time. Management expects the challenges facing the fiber-optic networking industry to subside in 2018, followed by a new multi-year period of secular growth. The turning point should fall in the quarter ending in June, which is the final reporting period of Oclaro's fiscal year, when sales are expected to see a return to year-over-year growth.

Oclaro's share prices have now fallen 19% over the last 52 weeks, and that's including the strong February surge. Trading at just 9.5 times trailing earnings and with a clear path back to industrywide growth, Oclaro is a tempting ticker for value-conscious investors right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.