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Disappointing 3Q for JDS Uniphase - Analyst Blog

Posted
5/3/2012 8:49:00 AM
By: Zacks.com
Referenced Stocks:FNSR;JDSU;OCLR;OPLK;OPXT

Yesterday, after market close, JDS Uniphase Corp. ( JDSU ) declared disappointing financial results for the third quarter of fiscal 2012. Both the company's top- and bottom-line fell below the Zacks Consensus Estimates. Consequently, in the after market trade on NASDAQ, stock price of JDS Uniphase was down by 54 cents (4.49%) to $11.50.

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. JDS Uniphase cited delay in carrier order and volatile global macro-economy as the primary reasons for this weak performance.

Quarterly net revenue was $409.2 million, down 10.1% year over year, and well below the Zacks Consensus Estimate of $420 million. On a GAAP basis, quarterly net loss was $17.4 million or a loss of 8 cents per share compared with a net income of $38.6 million or 16 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special items) EPS was 5 cents, missing the Zacks Consensus Estimate of 7 cents.

Gross margin in the reported quarter was 45.5% compared with 47.6% in the year-ago quarter. In the third quarter, operating expenses were $177.3 million, down 5.2% from the prior-year quarter. However, quarterly operating loss was $7.6 million compared with an operating income of $12.6 million in the prior-year quarter.  Total segment operating income in the previous quarter was $29.9 million compared with $55 million in the prior-year quarter.

At the end of the third quarter of fiscal 2012, JDS Uniphase had $718.5 million of cash & marketable securities and $300.8 million of outstanding debt on its balance sheet compared with $695.7 million of cash & marketable securities and $285.8 million of outstanding debt on its balance sheet at the end of fiscal 2011. At the end of the reported quarter, debt-to-capitalization ratio was 0.22 compared with 0.21 at the end of fiscal 2011. JDS Uniphase generated $13.2 million of cash from operations in the third quarter of fiscal 2012.

Revenue Segments

In the third quarter of fiscal 2012, Communications Test and Measurement segment accounted for $177.8 million of revenue, down 6% year over year. Communications and Commercial Optical Products segment generated $173.1 million, down 17.3% year over year. Within this segment, Optical Communications revenue was $143.2 million, down 22.5% from the prior-year quarter and Commercial Lasers business revenue was $29.9 million, up 21.1% from the prior-year quarter. Advanced Optical Technologies segment generated the remaining $58.3 million revenue, up 2.6% year over year.

Geographic Segments

In the third quarter of fiscal 2012, the Americas segment accounted for 47% of total revenue, the EMEA segment generated 25%, and the rest 28% came from the Asia-Pacific region.

Future Financial Outlook

For the fourth quarter of fiscal 2012, management expects the company's non-GAAP revenue to be within the range of $415 million - $435 million.


 
FINISAR CORP (FNSR): Free Stock Analysis Report
 
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