NOK) is making deals. Also making things interesting is Cisco's ( CSCO) impressive beat-and-raise performance after which the network giant hinted at broad recovery in carrier spending. With these factors in mind, it would seem appropriate to raise expectations for Finisar ( FNSR), a company I've always wanted to like but just couldn't. Although Finisar has a decent lead in the optical components space, management has not been able to convert this advantage into significant free cash flow. Now seems like the time. JDSU). What's more, given the 150 basis-point sequential improvement in gross margin along with the 15% sequential rise in net income, management has figured out ways to leverage the company's strengths into profits. As the carrier spending environment continues to recover, it will be interesting to see if this trend continues. Given Finisar's upgrade cycle, which should continue to boost sales, I wouldn't bet against the company.
I'm not going to pretend that this was a blowout quarter. But it was certainly a solid performance by a company that is still trying to win the Street's respect. What these results also demonstrate is, among other things, that there is indeed cause for investor optimism, and the expected rebound in telecom companies is not as far-fetched as previously thought. I say this while understanding full well Finisar still has some obstacles to face. Although several of its high-profile clients including Cisco and Ciena are performing well today, which helps boost Finisar's earnings, there are still a handful such as Brocade ( BRCD) that haven't been able to capitalize on the spending recovery. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.