Shares of fiber-optic networking modules maker NeoPhotonics (NYSE:NPTN) surged as much as 23.8% higher on Tuesday morning, following the release of strong second-quarter results. By 11:40 a.m. EDT, the stock had cooled down slightly to a 19.7% gain.
NeoPhotonics' second-quarter revenues rose 11% year over year, landing at $81.1 million. Your average analyst would have settled for $73.6 million. On the bottom line, adjusted net losses decreased from $0.15 to $0.14 per share. Here, the Street had been looking for a deeper $0.20 loss per share.
Product shipments increased more than 30% over the first-quarter volumes in Europe and North America while Chinese order volumes stayed low. Management expects the Chinese business to resume growth in the third quarter and beyond, now that the ban on doing business with major customer ZTE has been lifted.
In a prepared statement, NeoPhotonics CEO Tim Jenks expressed optimism about his company's near-term business trends.
"We met our key financial metrics for the quarter and with our new product traction and increasing momentum in our core markets, we are optimistic for continued improvement," Jenks said.
Investors embraced these results and management comments, and the stock is now trading at the highest prices seen in the last 52 weeks -- but still more than 50% below NeoPhotonics' two-year highs.