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JDSU Warns of Another Shortfall

The end of a grim day in the telecommunications market just got grimmer. JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU) announced after the North American stock markets closed that it was further revising its revenue forecasts downward for the next two quarters (see JDSU Lowers Outlook).

The company now expects sales for its fourth quarter to be approximately $600 million as compared to earlier guidance of $700 million. The quarter ends June 30, 2001.

Further yet, the company expects sales of only $450 million for its first quarter of fiscal 2002 ending September 29, 2001. That would mark yet another significant sequential decline in revenue.

"This revised outlook reflects continued weakness in telecommunications carrier spending and inventory reductions by the company's system provider customers," reads a company statement. Investors had already been expecting some bad news; JDSU stock had gradually eroded to a 52-week low before the news was announced today at 4:05 PM ET. Shares had dropped 0.37 (2.61%) to 13.81 during regular market hours.

But the magnitude of the shortfall is likely to rattle the market on Friday. After the news was announced, shares dropped another 1.60 to 12.21 in after-hours trading on the Island ECN.

"The sentiment that September might be worse than June was on people's minds already," says Joseph Wolf, an analyst with UBS Warburg. "But the magnitude of the cut in expectations is surprising.

"This is an industry that is going through a dramatic change. Different pieces will be valued in different ways. We'll see some things becoming commoditized, and pieces of JDSU may end up looking like that."

The company will record inventory write-downs in its fourth quarter. This is expected to result in a fourth-quarter pro forma loss of $0.06 to $0.08 per share after exclusion of restructuring charges.

"The business downturn has been rapid, steep, and unprecedented, and the continuing lack of visibility from our customers suggests to us that a cautious outlook continues to be warranted for the short term," stated Jozef Straus, Cochairman, President, and CEO. "At present, order levels clearly reflect lower carrier capital spending and the resulting desire of our customers to reduce inventories sharply.

— R. Scott Raynovich, Executive Editor, and Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
photonic 12/4/2012 | 8:14:36 PM
re: JDSU Warns of Another Shortfall
Thats all you have to say? No analysis of what went wrong at JDSU and how their management screwed up? No reasons as to why they piled up so much inventory? Nothing about the imminent lay offs? Nothing about what product lines are causing the most damage? Nothing about the many acquisitions that may be haunting?

I am sure you would have written details about this stuff had it been CSCO warning today, right?
Lopez 12/4/2012 | 8:14:35 PM
re: JDSU Warns of Another Shortfall So Steve, I guess you had second thoughs about asking people why they read these boards?

The removed post was along the lines of:

"photonic, I've looked at your posts and you sure are whiny. I get paid to read these boards, why are you here?"
Steve Saunders 12/4/2012 | 8:14:34 PM
re: JDSU Warns of Another Shortfall yes, I regretted making it as soon as I posted it. Photonic is entitled to his opinion (he said, grudgingly).

Fortunately, I have the power to remove my own posts (insert evil laugh here). One of the benefits of owning your own Web site.

Steve

photonic 12/4/2012 | 8:14:29 PM
re: JDSU Warns of Another Shortfall
Rather than make smart "a**" comments and hide under the cover of "whiny" readers, why don't you actually offer an analysis of all the points I raised in my post.

BTW, you notice the "infrequency" with which I post here. I do so only when I notice blatantly pathetic coverage on some articles.

optomatic 12/4/2012 | 8:14:27 PM
re: JDSU Warns of Another Shortfall ...only when I notice blatantly pathetic coverage on some articles

Read: when bad things are said about companies in which you hold stock, or when bad things are not said about competitors to those holdings.
Milano 12/4/2012 | 8:14:26 PM
re: JDSU Warns of Another Shortfall Nortel Forecasts Second-Quarter Loss, Cuts Jobs

TORONTO (Reuters) - Nortel Networks Inc , in a shock warning to financial markets, on Friday announced new job cuts and predicted a big second quarter loss as customers cut back significantly on purchases of telecommunications equipment.


In a statement issued before the markets opened on Friday Nortel, the world's largest supplier of telecom equipment, said it expects a second-quarter loss of $19.2 billion after charges incurred in the restructuring and streamlining of the company.


Facing the prospect that customers might not flood back until the second half of 2002, Nortel also said it was adjusting "intangible assets" by $12.3 billion and halting dividend payments.


"While there can be no certainty as to the duration of severity of this industry adjustment, meaningful growth in spending is not expected to occur before the second half of 2002, after economic concerns subside and rationalization of the telecom industry is well underway," chief executive John Roth said in one of two statements.


The news hit Nortel's stock price in pre-market trading and put tech stocks in other countries under severe pressure. Shares in Finland's Nokia dropped 6 percent in Helsinki.


Nortel was trading down at $9.50 in premarket dealings in New York, down from Thursday's close of $10.60. The share is just over 10 percent of its year-high around $89.


Nortel said it would report a loss of $1.5 billion or 48 cents a share on revenue of $4.5 billion in the second quarter before the impact of charges for bad debts and a work force reduction.


The company said it would slash a further 10,000 jobs, above and beyond the 20,000 already announced in April.


Charges to be taken in the second quarter include $950 million for inventory write-downs and bad debts, $830 million for work force reductions, and $2.6 billion for the closure of various businesses.


Nortel said it would discontinue its access solutions operations, which accounted for 7.7 percent of revenues in fiscal 2000 and 6.9 percent of Nortel's revenues in the first quarter of 2001.


The company also said it had agreement for a $2 billion unsecured credit facility to give its flexibility to "execute our work plan over the next 18 months."
Photonboat 12/4/2012 | 8:14:25 PM
re: JDSU Warns of Another Shortfall Ouch! Nortel is taking a huge loss, mainly an accounting one as they will write down the value of assets and take a one-time charge. Is this the day everyone acknowledges our problems are a lot deeper than a one-time inventory correction?

Michael Powell where are you? Posters to this board can nitpick lightreading over coverage of JDSU vs. Cisco, but does this amount to arguing over trivial matters in a burning house? There are major problems in the telecom sector with the carriers--microeconomic flaws of the 1996 Telecom Act. The CLECs are collapsing where it had been hoped we would see a cornucopia of competition. Sure, we can quibble on these boards about the merits of one firms OEO OXC vs. another's OEO OXC, but ultimately we have a microeconomic problem at the carrier level and we won't see the competitiveness necessary to bolster the sales of the equipment vendors.

Ok, maybe I'm wrong here--I'm just upset because I can't get a DSL line. And so are a lot of other people, which is the problem, in a nutshell.
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