3 Earnings Reports That Caught My Attention Last Week: Ciena Corporation (CIEN), Smith & Wesson Holding Corporation (SWHC)

As first-quarter earnings begin to wind down, I can’t help but point out that the majority of earnings reports we’ve covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it’s easy for some earnings reports to fall through the cracks.

Each week for the past year, I’ve taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we’ll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Source: Yahoo! Finance.

Ciena Corporation (NASDAQ:CIEN)
Earnings time for Ciena, a telecom network equipment provider, is typically when its shareholders retire to their foxholes, don their hard hats, and prepare for the worst. In short, Ciena’s not had the best track record of delivering on its promises of growth. Its just released first-quarter results, however, speak otherwise.

In a quarter where Wall Street had expected Ciena Corporation (NASDAQ:CIEN) to lose $0.13 per share, it reported a nearly 9% rise in revenue to $453.1 million and a profit of $0.12! At first I was amazed that shareholders weren’t rioting in the streets, but then I realized that a bullish trend was signaled months ago among networking companies when AT&T Inc. (NYSE:T) and Sprint Nextel Corporation (NYSE:S) both signaled their intentions to beef up infrastructure and 4G LTE network spending.

Ciena’s outperformance should have also been a dead giveaway after fiber-optic products maker JDS Uniphase Corp (NASDAQ:JDSU) crushed the Street’s estimates in late January with its second-quarter results. JDS and Ciena Corporation (NASDAQ:CIEN) go together like peanut butter and jelly and rarely does one do well (or poorly for that matter) without the other following. With JDS expanding its operating margin by 210 basis just from its sequential first-quarter, investors should have been expecting a beat here. For future reference, keep an eye on these two peas-in-a-pod if you want to know the true health of the telecom network equipment industry.

Smith & Wesson Holding Corporation (NASDAQ:SWHC)
In the case of Smith & Wesson, there was absolutely no doubt that it was going to fire past Wall Street’s expectations. For the quarter, the gun manufacturer reported a profit of $0.26 per share – or more than triple the $0.08 reported in the year-ago period – as revenue rose 39% to $136.2 million. The logic behind the move in Smith & Wesson and its biggest rival, Sturm, Ruger & Company (NYSE:RGR) is pretty clear-cut: Consumers are concerned that the tragic deaths at Newtown, Conn., will lead to stricter gun control enforcement by the Obama administration – and they’re probably right.

Ultimately, it was Smith & Wesson Holding Corporation (NASDAQ:SWHC)’s guidance that was expected to do the talking given the projected beat; and shareholders took every opportunity to sell the news. Although the company boosted its full-year revenue guidance to $575 million to $580 million, an expected 40% increase over 2012, investors had hoped for an even rosier forecast with the potential for stricter gun controls on the way.

Sturm, Ruger crushed the Street’s estimates in similar fashion, yet analysts are expecting EPS to fall noticeably in 2014 for both gun manufacturers. The amazing run in gun makers just might be coming to an end sooner than anyone had anticipated.