(JDSU) A Mixed Bag for JDS Uniphase

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 Р$430 million.

Recommendation

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

Read the full analyst report on “FNSR”
Read the full analyst report on “OPLK”
Read the full analyst report on “JDSU”
Read the full analyst report on “OCLR”
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