One of Oclaro's 100-gigabit coherent signal receivers. Photo: Oclaro.

What: Shares of Oclaro (NASDAQ:OCLR) jumped as much as 20% higher on Thursday morning, boosted by a rosy batch of preliminary first-quarter results. The stock is now trading very close to its 52-weeks highs.

So what: Slated to report earnings Nov. 3, Oclaro's management decided to spill some of the beans a little early.

Sales will land near $87.5 million, at the high end of the official guidance range and nearly $2 million above the current Street view. Gross margins and adjusted EBITDA earnings will also climb above the top ends of original guidance ranges, based on an initial review of the first quarter's operations.

Now what: The maker of optical components and modules for high-speed data networking needs isn't in the habit of shocking the Street. The company has missed analyst earnings targets in four of the last seven quarters, and the positive surprises have always been modest.

This quarter is shaping up to tell a very different story.

Citing strong interest in Oclaro's recently introduced 100-gigabit products on top of surprisingly good demand for older and slower product categories, Oclaro CEO Greg Dougherty noted that profit margins are on the rise.

Oclaro's positive and early report triggered a bonanza of optimism across the optical networking sector. Fellow optical components provider Applied Optoelectronics (NASDAQ:AAOI) leapt more than 8% higher on the promise of an active market. That company reports its own earnings on Nov. 5, two days after Oclaro's full-feathered report.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

NeoPhotonics (NYSE:NPTN), which faces off against Oclaro in the optical modules market, will beat these peers to the punch and report full results on Nov. 2. Today, NeoPhotonics shares rose nearly 4% thanks to Oclaro's good tidings.

We'll have to wait and see exactly how the chips fall as these full reports drop in. If everyone delivers on Oclaro's market promises, the cable and telecom giants must be getting ready to roll out their next-generation systems already. And if Oclaro's strength turns out to be unique in an otherwise tepid sector, we're just witnessing one company taking market share from the competition.

Grab some popcorn and stay tuned.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.