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On Tuesday evening, Calix (NYSE:CALX) reported better-than-expected Q4 revenue and EPS results. Revenues were $91.6, topping the Street's $89.7M consensus. EPS of $0.08 was a penny ahead of the Street's $0.07 estimate.

The company's guidance was even more impressive. For 2012 (and beyond), management believes it can deliver 20% revenue growth. Consensus estimates have only called for 15% growth. This represents a $17.5M bump in 2012 expectations and a much larger increase in longer-term projections.

Shares of CALX responded by rising 30% in the early-Wednesday session. Oddly, shares of Zhone Technologies (NASDAQ:ZHNE) -- one of our other "Stocks to Triple in 2012" -- were only up modestly in early trading, but started to gain steam in the afternoon.

Investors are clearly interpreting CALX's results as the "all clear" signal they've been waiting for. 2011 was marred by stimulus delays, a terrible winter in the northern U.S., and the Japanese tsunami, which wiped out fiber-optic cable supply. However, just as automotive stocks have come roaring back from the disaster, Broadband Stimulus stocks are now starting to follow suit. Indeed, the charts of CALX and ZHNE have both broken to the upside.

The move appears justified. All of the headwinds these companies faced in 2011 have now turned into tailwinds. Last year's stimulus delays will now help the 2012 comps, not hurt. Similarly, this year's weather has been as good and last year's was bad. Finally, last year's fiber shortage will provide a noticeable boost. On the call, management stated that "perceptions are still trailing (the actual situation)". In other words, most people don't fully understand how quickly things are improving.

At a time when most stocks are hitting multi-year highs, CALX and ZHNE are just starting to play catch up. This suggests that the shares could benefit from a rotation out of big winners into oversold names.

Looking forward to the rest of 2012, most companies are hitting historically high profit margin levels. This, combined with a tepid forecast for GDP growth, implies that the average company will show slower growth this year. They will also have less room to grow EPS via margin expansion. Slow growth generally leads to P/E contraction, putting a ceiling on further gains. Adding to the challenge, taxes on long-term capital gains will increase to 20% next year (from 15% at present). This will provide investors with heavy incentive to sell their long-term winners before year-end.

In contrast, Broadband Stimulus "beneficiaries" like CALX and ZHNE were hammered in 2011. Both companies' sales and profit margins have plenty of room to grow. Of equal importance, their revenue downside is limited because the U.S. Government will be footing the bill all stimulus-related projects. With the fiber cable shortage abating, CALX and ZHNE should experience the clearest sailing in years, whether the economy continues to recover or not. If issues in Europe and China cause the U.S. economy to falter, stocks like these will be among the safer ports in the storm. Companies like Clearfield (NASDAQ:CLFD) and Seagate (NASDAQ:STX) should benefit from similar dynamics.

As for the 2013 capital gains tax change, CALX and ZHNE have produced more long-term tax losses than most companies. Of course, this will change when their share prices reach new 52-week highs ($2.87 for ZNHE and $22.97 for CALX -- more than 100% above today's levels for both stocks). Until then, it will benefit investors to hold these stocks at least through 2013 (when those losses will be eligible to offset higher taxes on long-term winners).

Consistent ZHNE's earnings report last month, CALX's results provided investors with confirmation that Broadband Stimulus stocks are finally leaving the launch pad.

Source: Calix Reports Better Than Expected Earnings: Who's Next?