JDS Uniphase Tops on Q4 Earnings and Revenues, Guides Low - Analyst Blog

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

However, management provided a tepid outlook for the ensuing first quarter of fiscal 2015. As a result, in the aftermarket trade on Nasdaq, the stock price of JDS Uniphase slipped 42 cents (3.53%) to $11.49.

Quarterly net revenue came in at $448.6 million, up 6.5% year over year and also ahead of the Zacks Consensus Estimate of $436 million.

On a GAAP basis, quarterly net loss from continuing operations was $25.4 million or 11 cents per share compared with a net income of $91.5 million or 38 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share of 8 cents were a penny higher than the Zacks Consensus Estimate.

Jds Uniphase Corporation - Earnings Surprise | FindTheBest

Adjusted gross margin, in the reported quarter, stood at 50% compared with 46.1% in the year-ago quarter. Operating expenses were $226 million, up 15.1% year over year. Adjusted operating margin was 8.7% compared with 7.2% in the year-ago quarter. Quarterly adjusted EBITDA was $57.7 million as against $48 million in the year-ago quarter. Overall book-to-bill ratio was greater than 1.0.

JDS Uniphase generated $45.2 million of cash from operations in the quarter under review. At the end of fiscal 2014, JDS Uniphase had $849.4 million of cash & marketable securities and $536.3 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 0.31 at the end of the reported quarter.

Revenue Segments

In the fourth quarter of fiscal 2014, the Network and Service Enablement segment generated $209.1 million in revenues, up 10.2% year over year. The Communications and Commercial Optical Products segment recorded $196.9 million in revenues, up 8% year over year. Within this segment, Optical Communications revenues came in at $156.2 million, up 1.4% year over year and Commercial Lasers business revenues stood at $40.7 million, up 44.3% year over year. The Optical Security and Performance segment generated the remaining $42.6 million of revenues, down 13.4% year over year.

Geographic Segments

In the fourth quarter of fiscal 2014, the Americas segment accounted for 48.3% of the total revenue, the EMEA segment generated 22.4% and the remaining 29.3% was contributed by the Asia-Pacific region.

Future Financial Outlook

For the first quarter of fiscal 2015, management expects the company's revenues to be within the range of $405-$425 million. The mid-point of $415 million lies well below the current Zacks Consensus Estimate of $443 million. Non-GAAP earnings per share are expected to be 8 cents - 12 cents. The mid-point of 10 cents is a penny shy of the current Zacks Consensus Estimate.

Our take

JDS Uniphase manufactures instruments and testing tools to deploy and optimize communications equipment and broadband networks. The company supplies products to several large telecom/cable TV operators including AT&T Inc. ( T ), Time Warner Cable Inc. ( TWC ) and Verizon Communications Inc. ( VZ ). JDS Uniphase currently carries a Zacks Rank #4 (Sell).

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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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