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(CIEN) - Get Ciena Corporation Report

posted a small loss on $131.2 million in revenue in its second quarter, beating estimates on both lines.

Ciena lost $1.9 million, or nothing per share, in the three months to April 30, compared with a loss of $74.8 million, or 13 cents a share, last year. Sales rose 26.3% from a year ago. The most recent quarter included a stock-options expense of $4 million; excluding that and other items, adjusted earnings were a penny a share.

On average, analysts surveyed by Thomson First Call were forecasting a loss of a penny a share on sales of $129.1 million in the latest period.

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"With persistent focus on executing our network specialist strategy, we've been able to achieve the important milestone of profitability on an as-adjusted basis in our fiscal second quarter and are nearing break-even on a GAAP basis while at the same time delivering the industry-leading vision, functionality and service Ciena's customers have come to expect," the company said.

"In addition to solid revenue growth, our fiscal second-quarter results benefited from continued gross margin improvement resulting from our ongoing product and manufacturing-related cost reductions as well as a favorable product mix in the quarter."

Ciena's second-quarter gross margin was 48%, up from 41.9% in the first quarter. It cited "ongoing product- and manufacturing-related cost reductions and favorable product mix." Cash and short-term investments totaled $1.2 billion at the end of the period.

The company predicted sequential revenue growth of 7% to 10% in the current period, or roughly $140.4 million to $144.3 million. Analysts were forecasting $137.6 million.

"We continue to see indications that underlying demand drivers like high-speed broadband access, wireless, and video are fueling the need for capacity growth and a transition to next-generation networks," the company said. "We believe our role as the network specialist and our practical vision for network migration, whether from TDM to Ethernet, 2G to 3G, or Internet broadband to Triple Play, positions Ciena to benefit from these market dynamics."

The stock closed at $4.30 on Wednesday, up 45% on the year. In premarket trading Thursday, Ciena rose 20 cents, or 4.7%, to $4.50.