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JDS Uniphase (JDSU) Beats on Q3 Earnings, Sales Slip - Analyst Blog

JDS Uniphase Corporation 's JDSU third-quarter fiscal 2015 (ended Mar 28, 2015) earnings of 7 cents per share (including stock-based compensation expense) steered ahead of the Zacks Consensus Estimate of 3 cents. Adjusted earnings were also a penny higher than the year-ago quarter. Including special items, the company incurred a loss of 6 cents per share.

Quarterly net revenue came in at $410.7 million, down 1.7% year over year and below the Zacks Consensus Estimate of $418 million.

Adjusted gross margin stood at 48.3% in the third quarter compared with 47.6% in the year-ago quarter. Operating expenses (on a reported basis) climbed 5.2% to $206.6 million as both research and development expenses and selling, general and administrative costs were on the rise in the quarter. Meanwhile, adjusted operating margin improved to 7.6% from 6.5% a year ago. Quarterly adjusted EBITDA stood at $51.4 million, up 13.2%.

Meanwhile, JDS Uniphase has stated its intention to complete the process of its split into two separate publicly traded companies by the third quarter of calendar 2015.

Revenue Segments

In the third quarter of fiscal 2015, the Network Enablement segment generated $128.1 million in revenues, down 5.8% year over year. On the other hand, revenues from the Service Enablement division climbed 7.4% to $39 million. The Communications and Commercial Optical Products segment recorded $195.2 million in revenues, up 0.3% year over year.

Within Communications and Commercial Optical Products, Optical Communications revenues came in at $163.7 million, flat year over year while Commercial Lasers business revenues stood at $31.5 million, up 1.9% year over year. The Optical Security and Performance segment accounted for the remaining $48.4 million of revenues, down 5.3% year over year.

Geographic Segments

In the third quarter, the Americas segment accounted for 49.4% of the total revenue, the Asia-Pacific region generated 29% while the remaining 21.6% was contributed by the Europe, the Middle East and Africa (EMEA) region.

Liquidity

At the end of the third quarter, JDS Uniphase had $299.2 million of cash & cash equivalents and $555.2 million of debt on its balance sheet compared with $849.4 million and $536.3 million, respectively, at the end of fiscal 2014. The debt-to-capitalization ratio stood at 0.33 at the end of the quarter against 0.31 at the fiscal 2014-end.

Outlook

The company expects to record revenues (on an adjusted basis) of $423 million (+/- $10 million) in the fourth quarter of fiscal 2015. Adjusted earnings per share for the fourth quarter are projected at 11 cents (+/- 2 cents). The Zacks Consensus Estimate for the fourth quarter hinted at earnings of 9 cents on revenues of $444 million.

Zacks Rank

JDS Uniphase presently carries a Zacks Rank #2 (Buy). Better-ranked stocks include Apple AAPL , Agilent Technologies A and Gigamon Inc. GIMO . All the three stocks sport a Zacks Rank #1 (Strong 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 Nasdaq, Inc.


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

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