What happened

Shares of networking equipment maker Ciena (CIEN -0.71%) exploded higher on Thursday, shooting up 20% through 12:12 p.m. ET after soaring past analyst expectations in its fiscal fourth-quarter 2022 earnings report.

Heading into earnings, analysts had forecast that Ciena would earn a bare $0.08 per share on sales of $849.9 million for the quarter. Instead, Ciena did $971 million worth of sales -- and earned $0.61 per share.  

So what

Now, this news wasn't quite as good as that makes it sound -- but it was still good enough.  

Turns out, the $0.61 per share profit that so impressed Wall Street today was of the pro forma variety. Ratcheted back to generally accepted accounting principles (GAAP) standards, Ciena's profit was actually only $0.39 per share, and that was down 41% year over year. (Revenue was also down -- 7% below Q4 2021 levels.)

Still, all of this was better than analysts had expected from Ciena -- and better than Ciena's own management had expected. While down year over year, the numbers still qualify as good news today.

Now what

Furthermore, Ciena expects to keep the good news flowing into fiscal 2023 -- at least in some respects. "We expect to deliver outsized revenue growth in fiscal 2023 given our significant backlog and continued signs of gradual supply improvement," said CEO Gary Smith in the earnings release.

Revenue growth is expected to range from 16% to 18% in fiscal 2023 and, applied to the $3.6 billion in revenue Ciena booked in fiscal 2022, that works out to at least $4.2 billion, and perhaps a bit more -- versus Wall Street predictions of barely $4 billion. On the other hand, Ciena warned that gross profit margin probably won't improve in fiscal 2023, probably averaging 43% -- the same as in fiscal 2022.  

Still, a flat margin combined with mid-teens sales growth probably means that Ciena will beat analyst forecasts for $1.38 per share in profit next year -- a second straight year of beating expectations. No wonder investors are pleased.