Shares of Applied Optoelectronics (NASDAQ: AAOI) soared by 5.03% on November 7, 2024, following the release of the company's third-quarter 2024 earnings report. The fiber-optic networking company reported a larger-than-expected loss per share of $0.21, missing analyst estimates of a $0.17 loss. However, AAOI's revenue for the quarter beat Wall Street expectations, coming in at $65.15 million, a 4.08% increase from the consensus estimate of $62.60 million.
Despite the disappointing earnings miss, investors appeared to be more focused on AAOI's revenue growth. The company's revenue of $65.15 million represented a 4.16% year-over-year increase, indicating improving demand for its products. This better-than-anticipated revenue performance seemed to bolster optimism among investors regarding AAOI's revenue growth prospects.
The after-hours surge in AAOI's stock price following the earnings release suggests that the market is betting on the company's ability to drive further revenue growth. While the earnings miss was a setback, the revenue beat and year-over-year growth provided a positive signal to investors, who appear to be prioritizing AAOI's revenue trajectory over short-term profitability concerns.
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