Viavi Solutions (NASDAQ:VIAV) shares soared 14% after its earnings beat. Investors admired the decision to buy communications units from the UK’s Cobham for $455M and the company has topped the revenue and earnings estimate by $16 million and $0.02 per share in the second quarter.

However, despite the latest rally, Viavi stock declined 3% in the last month, down 23% from the 52-week high it hit in the mid of last year. The decline in VIAV shares was due to the steady decline in financial numbers in the past three years; its revenue declined an average of 4%.

Although Viavi Solutions has topped revenue and earnings estimates for the latest quarter, both financial metrics declined when compared to the past year period.    

The company’s revenue of $201 million in Q2 dipped 2.3 percent from the past year period. The plunge of 21% in Service Enablement revenue wasn’t completely mitigated by gains in Network Enablement.

“VIAVI’s fiscal Q2 revenue, operating margin and EPS all came in above the high end of our guidance,” said Oleg Khaykin, VIAVI’s President and Chief Executive Officer.

Revenue by segment: Service Enablement, $32.1M (down 20.9%); Network Enablement, $121.5M (up 3.8%); Optical Security and Performance Products, $48.2M (down 1.4%).

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Moreover, its GAAP operating margin was standing around 1.8% in Q2, down 140 bps year-over-year. Consequently, Viavi Solutions posted a loss of $0.02 per share, compared to earnings $0.23 per share in the same period last year.

However, investors applauded the company’s expansion strategy with UK Cobham communication unit. Cobham will help it in selling Wireless test businesses. Moving forward, the company expects to generate a slight improvement in the third quarter. It anticipates revenue in the range of $190M-$210M, compared to the consensus for $193.4M. On the positive side, earnings are likely to remain positive around $0.08-$0.10, in line with consensus for $0.09.

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