Telecommunications equipment maker Carrier Access (NASDAQ:CACS) is one of today's hot stocks, rising more than 25% at last check after the company reported its third consecutive quarterly net profit and Q3 revenues that rose significantly both sequentially and year over year.

Boulder, Colo.-based Carrier Access supplies telecommunications companies -- including ISPs, competitive carriers, wireless service companies, and others -- with a wide range of equipment, largely through reseller agreements. Among its top customers in 2002 were reseller Walker Associates and direct customer XO Communications.

The company's press release discussed a number of research, product, and marketing themes Carrier Access hopes will help the business continue to perform as it has this year. (Investors also hope so -- the stock has greatly outperformed the S&P 500 over the last 12 months, though it certainly had fallen quite a bit before beginning its turnaround.)

A close look at its income statement over the last three quarters (including the one reported today) shows why investors are plugging back into Carrier Access. It is reporting a net profit again thanks to top-line growth as well as cost management in both the R&D and SG&A departments. Sales have grown while inventory has fallen -- good news considering the still-shaky state of the telecom supplier business. Carrier Access has turned in some $5.4 million of free cash flow -- an encouraging sign especially for a company with a debt-free balance sheet.

The uncertainty surrounding Carrier Access' end users hasn't gone anywhere -- most are still fighting a running battle against debt on one side and the competition on the other. This doesn't always leave a lot of room to purchase technology, especially if it can't be shown to provide improved performance and cost efficiencies to a telecom and/or its customers. Given the shares' recent run, investors clearly believe Carrier Access is one company that delivers.

Dave Marino-Nachison can be reached at dmarnach@fool.com.