JDS Uniphase Corporation
) is the leading provider of communications test and measurement
solutions, and optical products to telecom carriers, cable
operators, and network equipment manufacturers.
We believe Communications and Test Measurement division of JDS
Unipahse will be immensely benefited from the massive growth of
wireless backhaul and DOCSIS 3.0 networks. As wireless carriers are
gradually increasing their backhaul capacity due to significant
growth of mobile Internet traffic and multimedia applications,
cable operators are quickly deploying DOCSIS 3.0 networks in order
to remain competitive by means of providing faster data access
Next-generation 4G Long-Term Evolution (LTE) networks became
another major growth driver for JDS Uniphase. The company offers an
innovative LTE test solution, which encompasses end-to-end,
real-time tracing, data assurance, and OSS to derive the maximum
performance and revenue potential of LTE. Moreover, acquisition of
QuantaSol and Network Solutions Division will further act as growth
catalysts for the company going forward.
Despite such strong fundamentals coupled with solid financial
results for the second quarter of fiscal 2012, management cited
disappointing revenue projection for the ensuing second quarter of
fiscal 2012 mainly driven by cyclical nature of the Optical
component industry, huge margin pressure and intense competition
from companies like
Avago Technologies Limited
Moreover, major telecom carriers are going through inventory
correction, and this scenario is expected to negatively impact JDS
Uniphase's business by a huge margin. We thus maintain our
long-term Neutral recommendation for JDS Uniphase Corporation.
Currently, JDS Uniphase Corporation has a Zacks #4 Rank,
implying a short-term Sell rating on the stock.
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