JDSU's Forecast Disappoints
If there's an increase in optical components sales coming soon, it doesn't look like JDSU (Nasdaq: JDSU; Toronto: JDU) will lead the way.
In reporting earnings for its third quarter, which ended March 28, JDSU produced a disappointing forecast for fourth-quarter revenues: $265 million to $285 million, compared with Wall Street estimates of $290.5 million. (See JDSU Posts Q3.)
That forecast does leave room for revenue growth -- just not very much room.
Table 1: JDSU Earnings Snapshot
|Net Income ($M)||-31.2||-85.2||-173%|
|Share Price ($)||14.31||5.57||-61%|
|Source: Thomson Reuters, JDS Uniphase|
Meanwhile, JDSU's third-quarter numbers were almost exactly on par with analyst expectations.
Table 2: JDSU vs. Analysts
|Analysts' Consensus Estimate Q309||Actual Q309|
|Net Income, non-GAAP ($M)||-6.6||-6.9|
|EPS, non-GAAP ($)||-0.03||-0.03|
JDSU shares were down 67 cents (12%) at $4.90 in early after-hours trading.
Analysts had theorized that the recession had stifled orders to the point where inventories were drying up, leading to a possible sales boost for the components companies -- not enough to end the downturn, but enough to get happy about. (See Coming Soon: An Optical Uptick?)
It's hard to specify what JDSU's forecast means for optical revenues, given that the company makes much of its money in other markets, such as test and measurement.
JDSU might not have triggered a party with its forecast, but the company says business is improving, at least.
"We did see an increase in demand over the last two months," CEO Thomas Waechter said in the opening minutes of today's earnings call.
Oclaro Inc. (Nasdaq: OCLR) -- the newly born tag team of Bookham and Avanex -- is predicting what could be increased sales in the June quarter, but it's hard to tell because Avanex's March-quarter revenues aren't being disclosed. (See Oclaro's Numbers and More Oclaro Numbers.)
JDSU's GAAP results include the loss of $45 million in goodwill, leaving just $11.1 million in goodwill on JDSU's balance sheet. At the end of its second quarter, JDSU wiped out most of its $744 million in goodwill, likely a concession that its acquisitions -- Acterna in particular -- have lost much of their value in the recession. (See JDSU Cuts Goodwill and JDSU Buys Into Testy Market.)
— Craig Matsumoto, West Coast Editor, Light Reading