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Shares of Optical Cable Corporation (OCC - Free Report) have gained 70.8% since reporting results for the second quarter of fiscal 2026, significantly outperforming the S&P 500’s 0.2% return. The stock has also delivered strong momentum over the past month, rising 85% against the S&P 500’s 0.6% decline.
Sales & Earnings Performance
Optical Cable reported second-quarter fiscal 2026 net sales of $22.2 million, up 26.6% from $17.5 million in the year-ago quarter. Gross profit increased 42.4% year over year to $7.6 million, while the gross margin expanded 380 basis points to 34.2%. The company posted net income of $1.1 million, or 12 cents per diluted share, against a net loss of $698,000, or 9 cents per share, in the second quarter of fiscal 2025.
For the first six months of fiscal 2026, net sales rose 16.1% to $38.6 million, and the company reported net income of $657,000, or 7 cents per share, against a net loss of $1.8 million, or 23 cents per share, a year earlier.
Optical Cable Corporation Price, Consensus and EPS Surprise
The company attributed its revenue growth to stronger sales in both its enterprise and specialty markets. Demand remained robust across enterprise, data center and severe-duty market sectors, with management highlighting opportunities in both domestic and international markets. Net sales to U.S. customers increased 21.2% year over year, while sales outside the United States climbed 45.3% during the quarter. Sequentially, fiscal second-quarter net sales increased 35.2% from $16.4 million in the first quarter of fiscal 2026.
Another indicator of demand strength was the company’s sales order backlog and forward load, which reached $13.3 million as of April 30, 2026. That represented an increase of more than 27% from $10.4 million as of Jan. 31, 2026, and more than 82% from $7.3 million as of Oct. 31, 2025. Management also noted that backlog remained strong at the end of May.
The sharp increase in profitability was driven by higher sales volumes and manufacturing operating leverage. The gross margin expanded to 34.2% from 30.4% a year earlier as increased production volumes helped absorb fixed manufacturing costs. For the first half of fiscal 2026, the gross margin improved to 33.5% from 29.9%.
Selling, general and administrative expenses increased to $6.3 million from $5.7 million due to higher employee and contracted sales personnel costs, as well as increased shipping expenses. However, SG&A expenses as a percentage of net sales improved to 28.2% from 32.7%, reflecting operating leverage as revenue growth outpaced expense growth.
Management said that gross profit margins also benefited from stronger manufacturing utilization, although margins may continue to fluctuate based on quarterly product mix. The company added that it generally offsets higher raw material costs through pricing adjustments.
Management Commentary
President and chief executive officer Neil Wilkin said that the company continued to build on its momentum during the quarter, citing year-over-year increases of 26.6% in net sales and 42.4% in gross profit. He said that growth was driven largely by enterprise, data center and severe-duty markets, while manufacturing operating leverage contributed to the stronger profit performance.
Management also emphasized growing opportunities in multi-tenant and enterprise data centers, noting that demand associated with large hyperscale data center investments is creating positive spillover effects for the markets OCC primarily serves.
Outlook & Demand Trends
Management expressed confidence in growth prospects for the second half of fiscal 2026. Wilkin said that Optical Cable expects to capitalize on ongoing opportunities across targeted markets and believes that revenues will continue to benefit from activity in data center markets during the remainder of the fiscal year.
Executives also indicated that current manufacturing and staffing levels provide room for additional revenue growth. The company is evaluating increases in manufacturing personnel and selective equipment additions to support anticipated long-term demand. Despite industry-wide optical fiber shortages and longer lead times, management said that it does not expect supply constraints to prevent revenue growth in the second half of fiscal 2026.
Other Developments
The company reported no acquisitions, divestitures or restructuring actions during the quarter. Management did, however, highlight its ongoing partnership with Lightera, a supplier of optical fiber, describing the relationship as complementary and beneficial. Executives said that Optical Cable has not experienced significant problems obtaining fiber or other key raw materials despite broader industry supply constraints.
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Optical Cable Posts Q2 Earnings on 27% Sales Growth, Rising Backlog
Shares of Optical Cable Corporation (OCC - Free Report) have gained 70.8% since reporting results for the second quarter of fiscal 2026, significantly outperforming the S&P 500’s 0.2% return. The stock has also delivered strong momentum over the past month, rising 85% against the S&P 500’s 0.6% decline.
Sales & Earnings Performance
Optical Cable reported second-quarter fiscal 2026 net sales of $22.2 million, up 26.6% from $17.5 million in the year-ago quarter. Gross profit increased 42.4% year over year to $7.6 million, while the gross margin expanded 380 basis points to 34.2%. The company posted net income of $1.1 million, or 12 cents per diluted share, against a net loss of $698,000, or 9 cents per share, in the second quarter of fiscal 2025.
For the first six months of fiscal 2026, net sales rose 16.1% to $38.6 million, and the company reported net income of $657,000, or 7 cents per share, against a net loss of $1.8 million, or 23 cents per share, a year earlier.
Optical Cable Corporation Price, Consensus and EPS Surprise
Optical Cable Corporation price-consensus-eps-surprise-chart | Optical Cable Corporation Quote
Strong Demand Drives Growth Across Markets
The company attributed its revenue growth to stronger sales in both its enterprise and specialty markets. Demand remained robust across enterprise, data center and severe-duty market sectors, with management highlighting opportunities in both domestic and international markets. Net sales to U.S. customers increased 21.2% year over year, while sales outside the United States climbed 45.3% during the quarter. Sequentially, fiscal second-quarter net sales increased 35.2% from $16.4 million in the first quarter of fiscal 2026.
Another indicator of demand strength was the company’s sales order backlog and forward load, which reached $13.3 million as of April 30, 2026. That represented an increase of more than 27% from $10.4 million as of Jan. 31, 2026, and more than 82% from $7.3 million as of Oct. 31, 2025. Management also noted that backlog remained strong at the end of May.
Margin Expansion & Operating Leverage Boost Profitability
The sharp increase in profitability was driven by higher sales volumes and manufacturing operating leverage. The gross margin expanded to 34.2% from 30.4% a year earlier as increased production volumes helped absorb fixed manufacturing costs. For the first half of fiscal 2026, the gross margin improved to 33.5% from 29.9%.
Selling, general and administrative expenses increased to $6.3 million from $5.7 million due to higher employee and contracted sales personnel costs, as well as increased shipping expenses. However, SG&A expenses as a percentage of net sales improved to 28.2% from 32.7%, reflecting operating leverage as revenue growth outpaced expense growth.
Management said that gross profit margins also benefited from stronger manufacturing utilization, although margins may continue to fluctuate based on quarterly product mix. The company added that it generally offsets higher raw material costs through pricing adjustments.
Management Commentary
President and chief executive officer Neil Wilkin said that the company continued to build on its momentum during the quarter, citing year-over-year increases of 26.6% in net sales and 42.4% in gross profit. He said that growth was driven largely by enterprise, data center and severe-duty markets, while manufacturing operating leverage contributed to the stronger profit performance.
Management also emphasized growing opportunities in multi-tenant and enterprise data centers, noting that demand associated with large hyperscale data center investments is creating positive spillover effects for the markets OCC primarily serves.
Outlook & Demand Trends
Management expressed confidence in growth prospects for the second half of fiscal 2026. Wilkin said that Optical Cable expects to capitalize on ongoing opportunities across targeted markets and believes that revenues will continue to benefit from activity in data center markets during the remainder of the fiscal year.
Executives also indicated that current manufacturing and staffing levels provide room for additional revenue growth. The company is evaluating increases in manufacturing personnel and selective equipment additions to support anticipated long-term demand. Despite industry-wide optical fiber shortages and longer lead times, management said that it does not expect supply constraints to prevent revenue growth in the second half of fiscal 2026.
Other Developments
The company reported no acquisitions, divestitures or restructuring actions during the quarter. Management did, however, highlight its ongoing partnership with Lightera, a supplier of optical fiber, describing the relationship as complementary and beneficial. Executives said that Optical Cable has not experienced significant problems obtaining fiber or other key raw materials despite broader industry supply constraints.