Shares of Casa Systems (CASA 5.26%) surged as much as 54.3% higher on Friday, following a fantastic earnings report. By 1:40 p.m. EST, the network infrastructure expert's stock had cooled down somewhat to a 37% gain.
In the fourth quarter of 2020, Casa Systems' revenue rose 7% year over year to $120.5 million. Adjusted earnings increased from $0.15 to $0.27 per diluted share. Your average Wall Street analyst would have settled for earnings of roughly $0.11 per share on sales near $107.5 million.
The company booked 26 purchase orders for 4G and 5G wireless systems in the fourth quarter, making wireless products the largest revenue generator in this period at 42% of total sales. That's a significant shift from the year-ago quarter, where cable broadband equipment accounted for a leading 48% of Casa's total sales.
Wireless sales nearly doubled in fiscal year 2020, while fixed telco network sales posted even faster growth of 150%. The laggard in Casa's portfolio these days is the cable networking segment, which CEO Jerry Guo sees as a "steady and consistent" contributor rather than a growth driver.
It's no surprise to see Casa Systems' stock surging to 52-week highs on this impressive earnings report, though I can't say I saw a 50% earnings-based jump coming. Volatile small-cap stocks like Casa can deliver outsize market moves every now and then.