Why Sonus Networks, Inc. Stock Jumped on Friday

What happened

Shares of network communications and network security company Sonus (NASDAQ: SONS) rose as much as 12.3% on Friday after the company released preliminary results for its third quarter. The stock is up 5.5% as of 12:15 EDT.

The stock's move likely reflects the company's significant outperformance relative to its guidance for the quarter. Preliminary revenue and non-GAAP earnings per share (EPS) were $74.5 million and between $0.25 and $0.26, respectively. Management had guided for revenue to be in the range of $70 million to $72 million and non-GAAP EPS to be between $0.17 and $0.20.

So what

Sonus CEO Raymond Dolan credited its strong third quarter to hitting some "major milestones for a large competitive displacement in North America" and a higher gross margin driven by strength in its software solutions.

Now what

For the full year, Sonus had previously guided for revenue to be from flat to a low single-digit percentage decline compared to 2016. But in Sonus' preliminary third quarter, the company said it now expects full-year results to be in line with the high end of the guidance range it previously provided. In other words, Sonus now expects full-year 2017 revenue to be flat compared to 2016.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.