Ciena

(CIEN) - Get Report

surged 23% Thursday after breaking a long sales-shortfall streak.

For its fourth quarter ended Dec. 31, the Linthicum, Md., maker of optical networking gear posted a loss of $495 million, or 87 cents a share. That compares with a year-ago loss of $115 million, or 24 cents a share.

Sales, though, climbed to $82 million from $71 million a year earlier. That was up on the $75 million the company had guided to in August, when it reported a third-quarter earnings disappointment that had many of the company's heartiest fans

throwing in the towel.

For the fourth quarter, Ciena said other measures improved as well. Gross margin rose to 29.5% in the latest period from 24.9% in the third quarter, and ongoing overhead costs fell 9%.

"Our fiscal fourth quarter was significant in a number of ways: we delivered stronger-than-expected revenue growth and improved gross margin, and we lowered our cash burn," said CEO Gary Smith. "There is more work to be done, but we have made meaningful progress in a number of strategic areas. In addition to expanding the breadth of product we are selling to existing customers, we also have developed new channel partnerships. These actions support our specialist approach to the market and our focus on specific applications that have a major impact on our customers' businesses."

Ciena has tried to sidestep the

collapse of its core optical networking business by acquiring companies that are focused on more popular segments of the market. Growth niches such as access devices have been in demand as phone companies look to merge various types of local traffic onto larger networks.

But Ciena's addition of these so-called multifunction box makers like Wavesmith and Catena have, for the most part, not paid off.

Thursday's gains come after a long string of setbacks at Ciena, a onetime Wall Street favorite. The stock plunged below $2 this summer after the company reduced sales guidance for its third quarter, marking its third consecutive sales shortfall.

Since then, though, Ciena shares have been swept up in the rally taking root among many lower-priced stocks. On Thursday Ciena jumped 55 cents to $2.89.