Earnings Preview: JDS Uniphase Corp.

JDS Uniphase Corp. (JDSU) is expected to report Q1 earnings after the market close on Thursday, November 5 with a conference call scheduled for 5 pm ET.

Guidance

The consensus estimate is 2c for EPS and $291.76M for revenue, according to First Call. On its last earnings call, management issued Q1 revenue guidance of $283M-$300M. JDSU shares have sold off recently based on what is expected to be a weak quarter relative to peers and consensus estimates.

Analyst Views

Thomas Weisel's analysis indicates that the sell off is likely overdone. They expect JDSU to report Q1 sales and EPS in line with their expectations of 3c on $295M in revenue, with better than expected performance in optical communications components. Looking forward: Weisel expects JDSU to provide December quarter guidance that should indicate an expectation of sequentially better metrics. EXFO Electro Optical (EXFO), a key competitor in field test, reported August quarter sales down over 30% year-over-year for its telecom segment but guided to solid sequential improvement for its November quarter. That suggests somewhat sluggish results for JDSU’s seasonally soft September quarter but boding well for its December quarter. Weisel says their below consensus FY11 estimates of 25c on $1.35B in revenue indicates that there could be some risk to consensus of 32c and $1.35B. Even if Weisel had to revise down their consensus FY11 estimates by 10%, an unlikely scenario, they still find JDSU’s valuation compelling.