JDS Uniphase Tops on Q2 Earnings and Revs - Analyst Blog

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Yesterday, after the closing bell, JDS Uniphase Corp. ( JDSU ) declared strong financial results for the second quarter of fiscal 2014. Both the top and the bottom line outpaced the respective Zacks Consensus Estimate.

Moreover, management provided a solid revenue outlook for the ensuing third quarter of fiscal 2014. As a result, in the aftermarket trade on Nasdaq, the stock price of JDS Uniphase was up by 58 cents (4.56%) to $13.30.  

Quarterly net revenue was $447.6 million, up 4.2% year over year and also above the Zacks Consensus Estimate of $434 million. On a GAAP basis, quarterly net income from continuing operations was $8.8 million or 4 cents per share compared with $3.3 million or 2 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share of 12 cents were well above the Zacks Consensus Estimate of 9 cents.

Adjusted gross margin, in the reported quarter, was 48.5% compared with 48% in the year-ago quarter. Operating expenses were $185.1 million, up 6.3% year over year. Adjusted operating margin was 11% compared with 11.4% in the year-ago quarter. Quarterly adjusted EBITDA was $67 million as against $65.9 million in the year-ago quarter.

JDS Uniphase generated $54.4 million of cash from operations in the reported quarter. At the end of the second quarter of fiscal 2014, JDS Uniphase had $1,065.4 million of cash & marketable securities and $524.2 million of outstanding debt on its balance sheet compared with $486.2 million of cash & marketable securities and no outstanding debt at the end of fiscal 2013. The debt-to-capitalization ratio was 0.30 at the end of the reported quarter. 

Revenue Segments

In the second quarter of fiscal 2014, the Network and Service Enablement segment generated $195 million of revenues, down 0.4% year over year. The Communications and Commercial Optical Products segment generated $198 million, up 6.6% year over year. Within this segment, Optical Communications revenues came in at $174.5 million, up 12.1% year over year and Commercial Lasers business revenues stood at $23.5 million, down 22.2% year over year. The Optical Security and Performance segment generated the remaining $54.6 million revenues, up 13.3% year over year.

Geographic Segments

In the second quarter of fiscal 2014, the Americas segment accounted for 47.8% of the total revenue, the EMEA segment generated 23.4% and the remaining 28.8% came from the Asia-Pacific region.

Future Financial Outlook

For the third quarter of fiscal 2014, management expects the company's revenues to be within the range of $420-$440 million. JDS Uniphase expects strong demand from the upcoming 4G LTE network deployment in China. Additionally, the company is expecting demand to rise for 10-Gbps and 40-Gbps systems for data center and cloud computing network.

Other Stocks to Consider

JDS Uniphase currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in the Communications Component manufacturing industry include Harmonic Inc. ( HLIT ), Premiere Global Services Inc. ( PGI ) and Envivio Inc. ( ENVI ). While Envivio currently carries a Zacks Rank #1 (Strong Buy), both Harmonic and Premiere have a Zacks Rank #2 (Buy).



ENVIVIO INC (ENVI): Free Stock Analysis Report

HARMONIC INC (HLIT): Free Stock Analysis Report

JDS UNIPHASE CP (JDSU): Free Stock Analysis Report

PREMIERE GLOBAL (PGI): 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 , Earnings , Stocks

Referenced Stocks: ENVI , HLIT , JDSU , PGI

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