JDS Uniphase Remains Neutral - Analyst Blog


JDS Uniphase Corp. ( JDSU ) reported solid financial results for the second quarter of fiscal 2012, easily beating the Zacks Consensus Estimates. Despite this, management has projected a disappointing revenue figure for the ensuing second quarter of fiscal 2012. The company cited three reasons for this weak outlook. These are: (1) precipitous macro-economic fluctuations (2) short-term inventory correction on the part of its customers and (3) a weak seasonality generally associated with the third quarter of any fiscal year.

However, we believe these negatives are already reflected in the current valuation as the stock price plummeted 38% in the last six months.Optical Networking component sector is highly competitive. The company competes fiercely with several players, such as Finisar Corp. ( FNSR ), Oplink Communications Inc. ( OPLK ), Opnext Inc. ( OPXT ), and Oclaro Inc. ( OCLR ), to name a few. Despite facing fierce competition, JDS Uniphase's newly launched differentiated products gained encouraging market traction.

We believe Communications and Test Measurement division of JDS Unipahse will be immensely benefited from massive growth of wireless backhaul and DOCSIS 3.0 networks. As the wireless carriers are gradually increasing their backhaul capacity due to significant growth of mobile Internet traffic and multimedia applications, the cable operators are quickly deploying DOCSIS 3.0 networks in order to remain competitive by means of providing faster data access speed.

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.

FINISAR CORP ( FNSR ): Free Stock Analysis Report
JDS UNIPHASE CP ( JDSU ): Free Stock Analysis Report

OCLARO INC ( OCLR ): Free Stock Analysis Report
OPLINK COMMNCTN ( OPLK ): Free Stock Analysis Report
OPNEXT INC ( OPXT ): Free Stock Analysis Report
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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: FNSR , JDSU , OCLR , OPLK , OPXT



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