JDS Uniphase Q1 Loss Narrows; Forecast Disappoints

JDS Uniphase posted a first-quarter loss that was smaller than the year-ago period and adjusted earnings that bested analysts' estimates, but shares slumped 3% to $14.80 AH as it issued a disappointing Q2 sales outlook. The telecommunications equipment maker said it expects sales of $372M-$394M for the current quarter; the $383M mid-point of that range is below the $386M average analyst estimate. The company blamed the lower-than-expected forecast on fewer orders from wireless carriers as they complete network-technology upgrades and cut back spending on testing equipment. For the first quarter, the company posted a net loss of $6.9M ($0.03/share) vs. a year-ago loss of $17.4M ($0.08/share) on sales that climbed to $356.7M from $318.1M. Excluding items, the company earned $23.7M ($0.08/share). Analysts had expected earnings of $0.06/share and revenue of $355.8M, on average. Consolidation in the fiber optics industry, it said, hurt sales (full earnings call transcript). Deutsche Bank analyst Cobb Sandler said he was encouraged by the company's 3.9% gross margin gain to 41.3%; he recommends investors buy the stock "as the company enters its seasonally strong period and as margins modestly improve from current levels." He added, "The company represents one of the few liquid ways to be exposed to overall improving optical trends."

Sources: Press release, Bloomberg
Commentary: JDS Uniphase Forecasts Growth Despite Telecom Ups and Downs • Will JDS Uniphase Get Another Fresh Start?
Stocks to watch: JDSU. Competitors: AVNX, FNSR, CIEN. ETFs: BDH
Earnings call transcript: JDS Uniphase F1Q08

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