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What’s up with networks? Are they telling us something?

Global Crossing (GLBC) delivered better than expected results Tuesday morning posting strong third-quarter results, as its North American unit swung to a profit for the first time. In addition, its rest-of-the-world segment posted a positive cash adjusted EBITDA of $13 million compared with a loss of $19 million in the year-ago quarter, and the trend is expected to continue. Results beat analyst expectations, where Deutsche Bank expected adjusted cash EBITDA of $45 million, and company delivered $74 million, on strongly rising gross profit margins. Classy. Earlier, GLBC was up 15%, right now trading at +8%.

But that’s not all. Nortel Networks (NT) also swung to a profit in the third quarter, its gross profit margins rose dramatically as well as the company cut costs and sold higher profitable equipment. Just as with GLBC, its gross profit margins rose dramatically as well. Just look at the stock performance yesterday. Up 15%. And we shouldn’t forget: Cisco (CSCO) should report today - something to keep an eye on.

Obviously, some are more fortunate than others. It appears that NT and GLBC have delivered strong numbers selling high-profitable services, and their strong results had a killer effect on their competitor Level 3 (LVLT) yesterday.

Is the network industry telling us something? Well, it may be telling us that “things are definitely not as bad as the market's worst fears," as BMO Capital Markets analyst Paras Bhargava wrote to clients yesterday. "Yesterday, we wrote that we were expecting a relief rally today. We are having one."

Source: Network Earnings Mollify Market Fears