Why Viavi Solutions Stock Triumphed on Thursday
Key Points
The company not only topped estimates for its third quarter, but it also trounced them for guidance.
It's doing well selling into not one, but two thriving industries.
Viavi Solutions (NASDAQ: VIAV) was a quick solution to ailing stock portfolios on Thursday. The tech equipment specialist published its latest quarterly earnings report, which featured not only beats on trailing results but on current-quarter guidance. That led to something of a bull run on the stock, which closed the day more than 15% higher in price.
A pair of convincing beats
After market close Wednesday, Viavi reported net revenue of just under $407 million for its third quarter of fiscal 2026. That was nearly 43% higher year over year and easily beat the consensus analyst estimate of nearly $394 million.
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The company's income from operations, a metric not under generally accepted accounting principles (GAAP), rose by a steep 79% to $85.5 million, or $0.27 per share. This also represented a beat, as the pundits tracking Viavi stock had been modeling only $0.23.
Viavi has numerous customers in the data center and aerospace industries, both of which are experiencing prosperous times. The company commented that it expects the two to continue growing in the foreseeable future.
Strong guidance adds to bullishness
Viavi also notched a double beat on its guidance for the current (fourth) quarter. Revenue is expected to come in at $427 million to $437 million, while non-GAAP (adjusted) net income is predicted at $0.29 to $0.31. Analysts collectively estimate the top line will be just over $402 million, and adjusted net income will land at $0.24.
This is a confident business selling into markets that are set to be future-proof for quite some time. I'm especially impressed that Viavi is effectively straddling two such industries, as each alone would provide plenty of reason to be bullish. This stock should be seriously considered for any portfolio, in my humble opinion.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Viavi Solutions. The Motley Fool has a disclosure policy.