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A Mixed Bag for JDS Uniphase - Analyst Blog

Posted: 10/31/2012 1:15:00 PM
Referenced Stocks: FNSR;JDSU;OCLR;OPLK

Yesterday, after the closing bell, JDS Uniphase Corp. ( JDSU ) declared mixed financial results for the first quarter of fiscal 2013. Optical Networking component sector is highly competitive. The company competes fiercely with several players like Finisar Corp. ( FNSR ), Oplink Communications Inc. ( OPLK ), and Oclaro Inc. ( OCLR ), to name a few. JDS Uniphase suffered primarily due to the competitive threats from its rivals and ongoing macro-economic headwinds.  

Quarterly net revenue was $420.9 million, up 1.2% year over year but fell below the Zacks Consensus Estimate of $426 million. On a GAAP basis, quarterly net loss from continuing operations was $9.8 million or a loss of 4 cents per share compared with a net loss of $3.6 million or 2 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special items) earnings per share were 10 cents, a penny above the Zacks Consensus Estimate.

Adjusted gross margin in the reported quarter was 45.8% compared with 47.6% in the year-ago quarter. In the reported quarter, operating expenses were $172.5 million, down 2.1% from the prior-year quarter. Quarterly adjusted operating margin was 9.2% compared with 11.2% in the year-ago quarter. Total segment operating income in the previous quarter was $38.7 million against $46.4 million in the prior-year quarter.

At the end of the first quarter of fiscal 2013, JDS Uniphase had $698.8 million of cash & marketable securities and $249.9 million of outstanding debt on its balance sheet compared with $722.5 million of cash & marketable securities and $445.5 million of outstanding debt on its balance sheet at the end of fiscal 2012. JDS Uniphase generated $43.1 million of cash from operations in the previous quarter.

Revenue Segments

In the first quarter of fiscal 2013, Communications Test and Measurement segment accounted for $169.5 million of revenue, down 8.5% year over year. Communications and Commercial Optical Products segment generated $194.9 million, up 8.1% year over year. Within this segment, Optical Communications revenue was $163 million, up 8.6% from the prior-year quarter and Commercial Lasers business revenue was $31.9 million, up 5.6% from the prior-year quarter. Optical Security and Performance segment generated the remaining $56.5 million revenue, representing an annualized growth of 11.7%.

Geographic Segments

In the first quarter of fiscal 2013, the Americas segment accounted for 50% of total revenue, the EMEA segment generated 23% and the remaining 27% came from the Asia-Pacific region.

Future Financial Outlook

For the second quarter of fiscal 2013, management expects the company's non-GAAP revenue to be within the range of $410 - $430 million.


We maintain our long-term Neutral recommendation on JDS Uniphase. Currently, it holds a short-term Zacks #3 Rank (Hold) on the stock.

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

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