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JDS Uniphase Misses Q4 Earnings

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Yesterday, after the closing bell, JDS Uniphase Corp. declared disappointing financial results for the fourth quarter of fiscal 2013, missing both the top and the bottom line of the Zacks Consensus Estimate. Management cited lower-than-expected capital expenditure by the telecommunications firms as the main reason for this disappointing performance.

AT&T Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and Time Warner Cable Inc. are some of the major clients of JDS Uniphase. They use instruments and test tools of the company to optimize their respective communications equipments and broadband networks. JDS Uniphase currently has a Zacks Rank #3 (Hold).        

Quarterly net revenues were $421.3 million, down 2.9% year over year and significantly below the Zacks Consensus Estimate of $439 million. On a GAAP basis, quarterly net income from continuing operations was $92.5 million or 38 cents per share compared with $1.4 million or 1 cent per share in the year-ago quarter. However, quarterly adjusted earnings per share were 7 cents, missing the Zacks Consensus Estimate by a penny.

Adjusted gross margin in the reported quarter was 46.5% compared with 46.4% in the year-ago quarter. In the reported quarter, operating expenses were $196.3 million, up 8.4% year over year. Quarterly adjusted operating margin was 8.7% compared with 9.3% in the year-ago quarter. Quarterly adjusted EBITDA was $48 million compared with $55.7 million in the year-ago quarter. Overall book-to-bill ratio was above 1.0.

At the end of fiscal 2013, JDS Uniphase had $486.2 million of cash & marketable securities and no 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 $57.1 million of cash from operations in the reported quarter.

Revenue Segments

In the fourth quarter of fiscal 2013, the Communications Test and Measurement segment accounted for $189.8 million of revenues, down 3.3% year over year. The Communications and Commercial Optical Products segment generated $182.3 million, down 1.5% year over year. Within this segment, Optical Communications revenues were $154.1 million, down 0.8% year over year and Commercial Lasers business revenues were $28.2 million, down 4.7% year over year. The Optical Security and Performance segment generated the remaining $49.2 million revenues, down 6.8% year over year.

Geographic Segments

In the fourth quarter of fiscal 2013, the Americas segment accounted for 48.5% of the total revenue, the EMEA segment generated 20.6% and the remaining 30.9% came from the Asia-Pacific region.

Future Financial Outlook

For the first quarter of fiscal 2014, management expects the company’s revenues to be within the range of $410 - $430 million.

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