Shares of Infinera (INFN 0.23%) were up 15.2% as of 3 p.m. ET Thursday after the optical networking equipment company announced strong preliminary third-quarter 2023 results.

More specifically, Infinera's quarterly revenue should be in the range of $378 million to $392 million, translating to adjusted non-GAAP (generally accepted accounting principles) net income of $0.03 to $0.08. Both ranges are well above Infinera's previous guidance, which called for revenue of $361 million to $391 million and adjusted earnings ranging from a loss of $0.06 per share to net income of $0.02 per share. Analysts, on average, were modeling a loss of $0.01 per share on revenue of $377 million.

On Infinera's solid preliminary results

Infinera CEO David Heard noted that all key preliminary metrics -- including revenue, gross margin, operating margin, and earnings per share -- arrived above expectations.

"Traction across our portfolio remained strong in the quarter," Heard added. "We secured new design wins with major telecom service providers and hyperscale customers for our Systems group, and received additional orders for our Subsystems group."

That raises the question: Why are these preliminary results, and not final results? According to Infinera's press release, the company's independent registered public accounting firm, Ernst & Young, "raised questions" late in the third quarter regarding Infinera's quote-to-cash and inventory cycles. The concerns stemmed from an inspection of EY's audit of Infinera's fiscal-2022 financial statements, and led to a conclusion by management that there were "material weaknesses" related to those cycles.

At the same time, however -- and this is why the market seems to have collectively shrugged off the "preliminary" aspect of today's report -- Infinera says its initial evaluation indicates that any resulting changes to its previously filed financial statements will not include lost revenue, but rather only "shifts in timing of revenue recognition between accounting periods."

What's next for Infinera stock?

Given its current visibility, Infinera expects fourth-quarter 2023 revenue to range from $421 million to $451 million -- roughly in line with analysts' estimates -- which should translate to adjusted net income per share of $0.05 to $0.13 (the midpoint of which is below estimates for $0.011 per share).

In the end, with shares of Infinera still down more than 40% year to date leading up to this report, however, it seems the market is more than pleased with the company's relative strength in the third quarter. If Infinera's underlying business can sustain this momentum in spite of broader macroeconomic uncertainty, I see no reason its stock won't continue to rebound in response.