JDS Uniphase Restructuring Starting To Pay Off

You have to hand it to JDS Uniphase Corp. (JDSU) for making a dramatic business decision and sticking to it. Almost three years ago, faced with a severe deterioration of its core optical networking business, the company made a bold move into a whole new business segment when it acquired Acterna Inc., a maker of testing and measurement equipment for broadband and optical networks, for $760 million.

Overnight, the move set up a second core business within the company that was almost as big as its original networking business, and laid the groundwork for a more steady stream of revenues from networking gear maintenance to help keep the company going when sales of the gear itself were slow. Time has shown this was no fly-by-night move on the part of JDSU, but a well-considered plan that it has stuck to over time. On Monday, the company announced that it will acquire the fiber division of Westover Scientific Inc., for $50 million. Although the deal was much smaller than the groundbreaking 2005 Acterna purchase, it further enhances the company's test and measurement business. Westover Scientific makes fiber optic inspection and cleaning solutions. JDSU in December made another acquisition, purchasing Bank Note Holographics Inc. for $138 million in cash and stock.

It's been a long road back for JDSU, one of the poster companies for dot-com and telecom bubble excesses, but today its progress is indisputable. Fiscal 2007 revenues of $1.4 billion were almost double the 2005 total of $712 million while net losses have narrowed to $26.3 million from more than 10 times that amount just two years prior. - Andrea Orr

See May 2005 story from TheDeal.com [$]
See Jan. 7 announcement from JDS Uniphase
See Dec. 11, 2007 post from Tech Confidential