Networking stocks are posting notable gains during trading on Thursday, as better than expected fourth quarter earnings from Alcatel Lucent (ALU) are helping to overshadow disappointing guidance from sector giant Cisco Systems (CSCO).
The strength among networking stocks is reflected by the 3.2 percent gain currently being shown by the NYSE Arca Networking Index. The move has the index on pace for its best close since early 2004.
French telecommunications equipment maker Alcatel-Lucent reported a surge in its fourth-quarter profits, with the increase driven by strong revenue growth in all geographic regions and business segments.
On an adjusted basis, Alcatel-Lucent's earnings per ADS topped analyst estimates. The company also said it expects strong profit growth and market improvement in 2011.
Alcatel-Lucent has surged up by nearly 20 percent on the news and is on pace for its best closing price since October of 2009.
Meanwhile, Cisco is sharply lower after reporting better than expected second quarter earnings but providing disappointing guidance.
The networking giant said it expects third quarter earnings of $0.35 to $0.38 per share, below analyst estimates for $0.40 per share. Cisco also said full year sales growth would be at the mid to low-end of its previous outlook.
Cisco has plummeted by 13 percent and is on track for its worst close since early December.
In other action within the sector, Juniper Networks (JNPR), Ciena (CIEN) and Adtran (ADTN) are posting strong gains and are all on pace for new benchmark highs.
Juniper is poised to close at its best price since mid-2001, while Ciena is on pace for its best close since 2008. Adtran is looking to close at a fresh historic high.
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