JDS Uniphase Poised to Gain from Wireless Backhaul Demand - Analyst Blog

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On Sep 3, 2014, we issued an updated research report on JDS Uniphase Corp. ( JDSU ). The company has demonstrated significant year-over-year improvement on strong contributions from its Internetworking and Broadband Access product divisions. However, JDS Uniphase slashed its first-quarter fiscal 2015 revenue guidance.  

The company has delivered positive earnings surprises in all four quarters last year, with an average beat of positive 32.54%. JDS Uniphase has also reported strong financial results for the fourth quarter of fiscal 2014 wherein both its top and bottom line outpaced the Zacks Consensus Estimate.  

We believe that the Communications Test and Measurement division of the company will immensely benefit from the massive growth of wireless backhaul and DOCSIS 3.0 network deployment. As wireless carriers are gradually increasing their backhaul capacity owing to significant growth of mobile Internet traffic and multimedia applications, cable operators are rapidly deploying DOCSIS 3.0 networks to compete by providing faster data access speeds.

Over the last two quarters, both Optical Security and Performance and Laser book-to-bill ratio stood above 1, mainly buoyed by higher demand for Gen 2 fiber lasers. Also, the Communications test and Measurement and Communications and Commercial Optical Products units have generated the highest order bookings in the last 10 years. Meanwhile, JDS Uniphase's newly-launched products coupled with the acquisitions of Trendium, Network Instruments and Arieso are the long-term positives for the company.

On the downside, ongoing global economic fluctuations may significantly mar the prospects of JDS Uniphase. Moreover, the consolidation trend of wireless networks and data centers will worsen the situation.

JDS Uniphase currently carries a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Other better-ranked stocks that belong to the sector include 8x8 Inc. ( EGHT ), Aerohive Networks, Inc. ( HIVE ) and Arista Networks, Inc. ( ANET ). Currently, all three have a Zacks Rank #2 (Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: JDSU , HIVE , EGHT , ANET

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