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News > Technology
JDS beats the Street
January 25, 2001: 5:19 p.m. ET

Fiber-optic component leader exceeds forecast by 2 cents, sees soft 3Q
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NEW YORK (CNNfn) - JDS Uniphase Corp. reported a fiscal second-quarter profit Thursday that beat the Street's expectations on stronger-than-expected sales, but signaled slightly slower revenue growth in the third quarter.

The world's largest supplier of components for fiber-optic networking systems said it earned $208 million, or 21 cents per share, during the quarter, excluding merger-related and other extraordinary charges. Analysts had expected the company to log an operating profit of 19 cents per share, according to a survey conducted by earnings research firm First Call.

Revenue for the quarter was $925 million, up 161 percent from $354 million during the same period last year. Analysts were generally expecting JDS to log about $924.1 million in sales during the quarter, according to the First Call survey. graphic

The company also said it expects revenue in the fiscal third quarter to be 7-to-10 percent above the second quarter. Analysts had generally expected third-quarter revenue growth to exceed 10 percent.

In a teleconference with analysts following the earnings release, JDS Chief Executive Jozef Strauss said the lower revenue forecast reflects expected softness in telecommunications service provider spending.

"We maintain an optimistic outlook for the March quarter that is prudently tempered only by uncertain carrier spending prices, customer inventory adjustment and a lower level of near-term sales visibility," Strauss said.

After falling $7.88, or 12.5 percent, to $55.19 in Nasdaq trade ahead of the earnings report, JDS (JDSU: Research, Estimates) shares edged up 44 cents to 55.63 in after-hours trade.

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The earlier decline in JDS Uniphase shares came amid a broader downturn in the fiber-optic segment Thursday, which was sparked in part by similar comments from Corning (GLW: Research, Estimates), the leading supplier of fiber-optic cable.

Corning on Wednesday also beat the Street's earnings expectations and essentially maintained its profit targets moving ahead. But a similar downward revision of its revenue-growth targets for the March quarter sparked a sell-off of its shares, which fell nearly 14 percent.

SDL (SDLI: Research, Estimates), which is set to be acquired by JDS Uniphase, also got caught in the fiber-optic fray, its shares sliding more than 32 percent on the day.

Despite the negative sentiment that appears to be building around the fiber-optic segment and the decreased visibility for telecom spending in the near-term, Strauss remains convinced that JDS Uniphase remains in a strong position to take advantage of the need for increased communications capacity which is being spurred by the massive amounts of data moving across the Internet.

graphic"There is much discussion about capital expenditure plans by carriers, inventory adjustments and lower visibility, as well as the broader macroeconomic climate," he said. "Nevertheless, the prospects for a market driven by bandwidth growth remain bright."

Strauss said the company's operating earnings in the third quarter will be equal to or slightly above the 21 cents per share it logged in the second quarter, which is in line with analysts' most recent expectations, according to the First Call survey.

For the whole fiscal year, the company has pegged a revenue-growth target between 115 and 120 percent, which is on the low end of the its guidance. Earnings per share for the year are expected to be 81 cents, which is a penny above the most recent consensus estimate. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.