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Analyst Blog

Yesterday, after the closing bell, JDS Uniphase Corp. (JDSU - Analyst Report) declared disappointing financial results for the third quarter of fiscal 2013, missing both the top and bottom line of the Zacks Consensus Estimate. Management cited lower-than-expected capital expenditure by telecom carriers is the primary reason for this poor performance.     

Quarterly net revenues were $405.3 million, up 0.5% year over year but below the Zacks Consensus Estimate of $418 million. On a GAAP basis, quarterly net loss from continuing operations was $28 million or a loss of 12 cents per share compared with a net loss of $16.2 million or 7 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special items) earnings per share were 4 cents, missing the Zacks Consensus Estimate of 6 cents.

Adjusted gross margin in the reported quarter was 45.9% compared with 45.6% in the year-ago quarter. In the reported quarter, operating expenses were $176.6 million, down 1.4% year over year. Quarterly adjusted operating margin was 6.8% compared with 7.2% in the year-ago quarter. Quarterly adjusted EBITDA was $44.6 million compared with $46.8 million in the year-ago quarter.

At the end of the third quarter of fiscal 2013, JDS Uniphase had $608.1 million of cash & marketable securities and $159.6 million of outstanding debt on its balance sheet compared with $921.6 million of cash & marketable securities and $292.8 million of outstanding debt on its balance sheet at the end of fiscal 2012. JDS Uniphase generated $28.2 million of cash from operations in the reported quarter.

Revenue Segments

In the third quarter of fiscal 2013, Communications Test and Measurement segment accounted for $174.2 million of revenues, down 2% year over year. Communications and Commercial Optical Products segment generated $179.2 million, up 3.5% year over year. Within this segment, Optical Communications revenues were $152.9 million, up 6.8% year over year and Commercial Lasers business revenues were $26.3 million, down 12% year over year. Optical Security and Performance segment generated the remaining $51.9 million revenues, down 1% year over year.

Geographic Segments

In the third quarter of fiscal 2013, the Americas segment accounted for 47.9% of the total revenue, the EMEA segment generated 23.5% and the remaining 28.6 % came from the Asia-Pacific region.

Future Financial Outlook

For the fourth quarter of fiscal 2013, management expects the company’s revenues to be within the range of $420 - $440 million.

Other Stocks to Consider

Currently, JDS Uniphasehas a Zacks Rank #3 (Hold). Other stocks in the industry which are performing well include Corning Inc. (GLW - Analyst Report), NICE Systems Ltd. (NICE - Snapshot Report) and Paltronics Inc. (PLT - Snapshot Report). While Corning currently has a Zacks Rank #1 (Strong Buy), both NICE and Paltronics carry a Zacks Rank #2 (Buy).

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