Perhaps the oddest thing about the current earnings season is how many companies have turned in mediocre to positively terrible results, yet have still seen their shares jump to new 52-week highs. Digital imaging technology guru OmniVision Technologies (NASDAQ:OVTI) gave us another example of this phenomenon last week, when it announced results for its fiscal first quarter that exceeded expectations but still landed in the red. Nevertheless, management presented an optimistic outlook that pushed shares sharply higher Friday after the announcement.

On revenues of $105.6 million that were down 39% from the same quarter last year, Omnivision's gross margin fell to 22.4% from 25.2% a year ago, although margins improved from the previous quarter. Operating expenses increased to over 30% of sales, and net losses landed at $9.9 million or $0.19 per share.

Excluding costs tied to stock-based compensation, losses were slightly less than $4 million or $0.08 per share. Wall Street expected losses after special items of $0.13 per share on slightly lower revenues than Omnivision actually brought to the table.

Company snapshot
For those unfamiliar with the company, its industry classification puts it in the same boat with integrated circuit maker Taiwan Semiconductor (NYSE:TSM), which is also one of its closest partners. OmniVision's digital imaging technology goes into cell phones and cameras, and it competes with certain segments of household names like Sony (NYSE:SNE), Eastman Kodak (NYSE:EK), and Micron Technology (NYSE:MU), all of which have lost money this year.

Recent reports that Apple's (NASDAQ:AAPL) iPods and iPhones will exclusively feature OmniVision's image sensors are promising, and management reported hopeful signs for next quarter, in which it expects earnings per share to come in between breakeven and $0.10 on revenues of $150 and $170 million.

The company reduced older, higher-cost inventories over the quarter, which helped it improve its gross margin sequentially, and short-term investments on its balance sheet have risen. Management said it has seen some degree of normality returning to the company's seasonal cycles and to the industry as a whole, and it expects a healthy recovery into January.

The big picture
At around 18 times forward earnings estimates for fiscal 2011, OmniVision's no bargain. But while this quarter's earnings marked the first signs of its turnaround, it is perhaps more significant that OmniVision's management believes that we've emerged from the bottom of the recession and that recovery is already underway.

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Fool contributor Chris Jones owns no shares of any company mentioned in this article. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. When Tom G found The Motley Fool's disclosure policy, it was living in a discarded refrigerator box under a highway underpass. Today, it's one of the most well-nourished specimens of its kind.