Sep. 11, 2014, 9:14 AM
Sep. 11, 2014, 7:11 AM
- "Combined, the two companies might be valued at $9.85-$14.80 with a midpoint of $12.33," says RBC Capital, upgrading JDS Uniphase (NASDAQ:JDSU) to Outperform, with price target lifted to $18 from $11.
- Previously: JDS Uniphase to split into two public companies
- JDSU +12.4% premarket to $13.61; other optical networking names, Ciena (NYSE:CIEN) +0.8%, Finisar (NASDAQ:FNSR) +1.5%.
Sep. 4, 2014, 4:42 PM
Sep. 4, 2014, 4:20 PM
- Finisar (NASDAQ:FNSR) expects FQ2 revenue of $305M-$320M and EPS of $0.23-$0.27, below a consensus of $337.5M and $0.35.
- The company blames an expected Q/Q drop in wireless transceiver sales following a strong FQ1, along with weak carrier spending and "a decrease in demand from several datacom customers with lumpy order patterns." Several analysts have already voiced concerns (I, II) about weak near-term sales.
- FQ1 datacom revenue +31% Y/Y to $241.2M. Telecom revenue +6% to $86.4M.
- Gross margin -220 bps Q/Q and -310 bps Y/Y to 32%. FQ2 GM guidance is at 31%-32%. Opex +5.4% Y/Y to $69.4M.
- Shares are halted. Rival JDS Uniphase (NASDAQ:JDSU) is down 0.9% AH. Finisar and JDS both sold off in afternoon trading after Ciena issued soft guidance this morning, while blaming the timing of an AT&T contract.
- FQ1 results, PR, earnings slides (.pdf)
Sep. 4, 2014, 4:02 PM
Sep. 3, 2014, 5:35 PM
Sep. 2, 2014, 1:45 PM
- Ahead of Thursday's FQ1 report, Jefferies' James Kisner has downgraded Finisar (FNSR -6.2%) to Hold, and cut his target by $6 to $19.
- Kisner cites weak pricing for both datacom and telecom optical components, weaker-than-expected 100G datacom share, a Chinese inventory correction, Cisco/Huawei vertical integration risk (previous), and looming price pressure/share loss to startups and possibly Intel.
- Fellow component vendors JDS Uniphase (JDSU -2.2%), Oclaro (OCLR -1.7%), and Alliance Fiber (AFOP -2.3%) are also off, as is equipment vendor Ciena (CIEN -2.1%). JDS and Alliance were among the names that followed Finisar lower last Wednesday, following cautious notes from MKM and RBC.
- Jefferies raised alarm bells about AT&T's wireline capex in June, before Juniper and JDS offered soft guidance blamed on light North American capex.
- A lot has been priced in: Finisar now only trades for 9x FY16E (ends April '16) EPS exc. net cash.
Aug. 27, 2014, 12:52 PM
- Ahead of Finisar's (FNSR -3.9%) Sep. 4 FQ1 report, MKM's Michael Genovese has respectively cut his revenue and EPS estimates for the quarter by $3M and $0.01, albeit while reiterating a Buy.
- Genovese predicts "soft 2HCY14 carrier capex and the mix shift to low margin Chinese sales is likely to result in fairly anemic Telecom revenue growth and limited [gross margin] expansion in the near term." But he's still upbeat about Finisar's datacom sales (boosted by Web data center buildouts), and thinks telecom sales "should improve in 2HCY15 as the 100G Metro market positively inflects."
- Likewise, RBC's Mark Sue is reiterating an Outperform, but offering cautious remarks. "Inventories are creeping upward, inventory lead-times are decreasing and there’s concern that current soft-pricing may continue or spread to higher speed products."
- Sue thinks Chinese competition is affecting pricing for "low-mid speed components," and suggests Finisar should slash capex and launch a buyback. Shares plunged in June due to light FQ1 EPS guidance that stemmed from margin pressure.
- A slew of other firms with strong telecom capex exposure are also trading lower. JDSU -1.8%. INFN -1.6%. CYNI -2.4%. AFOP -1.5%. CAVM -1.4%. ZHNE -1.6%. Juniper and multiple component vendors have already reported seeing soft near-term capex trends.
- For component vendors, a decent amount of bad news has been priced in since April.
Aug. 21, 2014, 3:59 PM
- Optical component vendors JDS Uniphase (JDSU +4.3%), Finisar (FNSR +3.4%), Oplink (OPLK +3.2%), Oclaro (OCLR +3.6%), and Alliance Fiber (AFOP +2.5%) have all rallied on a quiet day of trading, and so has client Ciena (CIEN +2.7%). No news has hit the wires to explain the gains.
- JDS, Oclaro, and Alliance Fiber all sold off in recent weeks (I, II, III) after providing disappointing guidance in their calendar Q2 reports. JDS (like Juniper following its Q2 report) observed soft North American wireline capex is pressuring industry sales.
Aug. 14, 2014, 12:06 PM
- Dan Loeb's Third Point LLC took a 7.25M-share position in Rackspace (RAX +4.3%) in Q2, along with a 3.5M-share position in Finisar (FNSR -0.2%) and a 2M-share position in InterActiveCorp (IACI +1.7%). (13F)
- Rackspace has jumped on the disclosure. The Web hosting/IaaS provider remains in the midst of a strategic review, and has been the subject of many M&A rumors.
- Finisar has ticked higher after selling off earlier in the wake of Cisco and Oclaro's reports. Shares fell yesterday in response to JDS Uniphase's guidance.
- IAC has moved slightly higher. Shares were already up following news the company has bought Ask.fm.
Aug. 12, 2014, 4:49 PM
- Though it beat FQ4 estimates, JDS Uniphase (NASDAQ:JDSU) is guiding for FQ1 revenue of $405M-$425M and EPS of $0.08-$0.12, below a consensus of $440.9M and $0.14.
- FQ4 gross margin was 50%, +240 bps Q/Q and +390 bps Y/Y. Opex rose 17% Y/Y to $226M. $160M was spent on buybacks in FY14.
- Network service & enablement revenue (test equipment/software) +10.2% Y/Y to $209.1M; optical communications (components/modules) +1.4% to $156.2M; lasers +44.3% to $40.7M; optical security/performance -13.4% to $42.6M. Test equipment and laser sales were respectively boosted by the Trendium and Time-Bandwidth acquisitions.
- Finisar (NASDAQ:FNSR) is following JDS lower.
- FQ4 results, PR
Jul. 23, 2014, 1:45 PM
- Juniper's (JNPR -9.8%) soft Q3 guidance, along with its related commentary on U.S. telco demand, is taking a toll on fellow telecom equipment suppliers Cisco (CSCO -1.2%), Ciena (CIEN -3.2%), Cyan (CYNI -2.5%), Zhone (ZHNE -6.5%) Ruckus (RKUS -1.6%), and Sonus (SONS -3.8%).
- Optical component vendors JDS Uniphase (JDSU -2.9%) and Finisar (FNSR -2%) are also off, as are several chipmakers (previous) with heavy networking/telecom exposure.
- On its CC (transcript), Juniper stated "market dynamics including M&A activity" are affecting the "sequencing and timing" of U.S. carrier projects. Jefferies reported in June AT&T has significantly cut its wireline capex in the wake of the DirecTV deal.
- There has been speculation AT&T is keeping a lid on wireline capex ahead of the full rollout of its ambitious Domain 2.0 initiative, which will feature the launch of software-defined networking (SDN) and network functions virtualization (NFV) platforms.
- Juniper insists it remains well-positioned with the aforementioned U.S. carriers, and that it has "major design wins" for next-gen projects. The company adds demand remains healthy with U.S. federal, cable, and Internet clients.
- The company's router revenue rose 7% Y/Y in Q2 to $617.8M, and its switch revenue rose 25% to $199.8M. Security product revenue fell 8% to $111.6M. The Junos Pulse VPN software ops (about to be sold for $250M) contributed $31.4M in revenue ($15.9M product, $15.5M service).
Jun. 13, 2014, 12:46 PM
Jun. 13, 2014, 9:11 AM
Jun. 12, 2014, 5:36 PM
Jun. 12, 2014, 4:19 PM
- Finisar (FNSR) expects FQ1 revenue of $320M-$335M, above a $317M consensus. But EPS guidance of $0.30-$0.34 is below a $0.41 consensus.
- Gross margin pressure is responsible for both the guidance and FQ4's EPS miss. FQ4 GM was 34.2%, +200 bps Y/Y but -300 bps Q/Q and below guidance of 35.5%. GM is expected to fall to 32% in FQ1.
- Finisar blames the FQ4 margin weakness on telecom product price cuts and the impact of recently-acquired u2t Photonics, whose products carry a lower GM.
- Opex +4.3% Y/Y in FQ4 to $65.9M, well below rev. growth of 25.7%. A 39.1% Y/Y increase in datacom product sales (boosted by the investments of Web/cloud service providers) offset a 2.5% drop in telecom sales, and helped drive the revenue beat.
- JDS Uniphase (JDSU) is following Finisar lower. Other optical component firms that could be hit: OPLK, OCLR, FN, NPTN.
- FQ4 results, PR
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