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.

Although management was right to be encouraged by the fact that 60% of this quarter's revenue arrived from the company's top 10 customers, it also means that two-thirds of the company's sales are heavily weighted on a sustained recovery. Although I'm inclined to believe that the recovery is real, the persistent struggles of Alcatel-Lucent make it tough to give the "all is clear" signal.

For now, though, Finisar investors have to be pleased with the improved margins and free cash flow, two metrics that have long been popular cited bear arguments against this company. Although I believe there could be plenty of long-term unrealized value based on the company's recent performance, I'm willing to wait one more quarter for confirmation. I was fooled once before.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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