shares jumped 18% Monday as the company's outlook brightened.

The Fremont, Calif., optical networking parts maker is still closing the books on the fiscal fourth quarter but says estimated sales for period ended in June will be $45.5 million. That figure compares with $40.1 million in the prior quarter and $42.4 million a year ago.

Analysts were looking for sales of $43.6 million in Avanex's fiscal fourth quarter, according to Reuters Research.

Looking ahead, the company expects fiscal first-quarter sales of about $49 million, which is 6% more than the $46 million Wall Street was looking for.

"The company is in the process of finalizing a net increase in inventory reserves and other operational provisions in light of its recent transfer of manufacturing operations to contract manufacturers," Avanex said. "Additionally, the accounts receivable reserves are being reviewed due to favorable collection history."

Avanex cut its cash burn to $7.7 million from $10 million in the previous quarter.

Shares of the company rose 29 cents to $1.93 in morning trading Monday.