Why Lumentum Holdings Inc Stock Jumped 21% Last Month

What happened

Shares ofLumentum Holdings(NASDAQ: LITE) were surging last month after the fiber-optic cable producer delivered strong profit growth in its second-quarter earnings report. As you can see from the chart below, the stock surged on the report, although shares fell off toward the end of the month.

LITE data by YCharts.

So what
More From Fool.com

Motley Fool Founders Issue New Stock Buy Alert
Forget GE! Heres how to play the largest growth opportunity in history
Forget Apple! Heres a Better Stock to Buy
He Made 21,078% Buying Amazon. Heres His New Pick

Lumentum shares jumped 14% on February 8 after the company beat earnings estimates in its second-quarter report. Adjusted earnings increased from $0.31 the year before to $0.57, which beat estimates at $0.51. Management credited "strong growth in new product revenue, particularly 100G Datacom, which was up 500% from the year before." Operating margin also reached a record high of 14.7%.
Image source: Lumentum Holdings.
Excitement seemed to be building for Lumentum's role in 3-D sensing technology, as revenue from that segment is expected to grow in the second half of the year.
Overall revenue also increased 21% to $265 million, though that slightly missed expectations at $265.7 million.
Now what
Looking ahead, the company forecast earnings per share of $0.46-$0.54 for the current quarter, ahead of the analyst consensus at the time at $0.47, though revenue guidance of $250-$265 million was underwhelming.
On March 2, the company announced an offering of $350 million of convertible notes, which the company said will fund manufacturing capacity expansion and working capital.
Fiber-optic stocks like Lumentum have been big winners in recent years, but the stock should remain volatile, especially if gains continue to be driven by hopes for 3-D sensing technology.
10 stocks we like better than Lumentum HoldingsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Lumentum Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of February 6, 2017.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.