Test & Measurement

JDSU Cuts Goodwill

7:00 PM -- A Securities and Exchange Commission (SEC) filing today reveals that JDSU (Nasdaq: JDSU; Toronto: JDU) is going to be writing down goodwill again. Possibly all of it.

The amount could be "up to the Company's total goodwill balance of $744 million," the filing states. We'll find out when JDSU reports earnings Feb. 5.

Goodwill represents how much a company overspent for its acquisitions, when measured by current standards. When the economy collapses, goodwill gets erased.

That erasure is a noncash charge and doesn't directly affect the company's health. But it does mean losses. Analysts polled by Reuters Research expected JDSU to report net losses of about $7 million, or 3 cents pre diluted share, as measured by generally accepted accounting principles (GAAP). That's now going to measure... well, a lot more.

In a sense, it's small potatoes. Light Reading's readers will recall JDSU's goodwill writedown of $38.7 billion in mid-2001 (the SDL era), which led to a single-quarter on-paper loss of $50.6 billion. (See Sizing Up JDSU's Massive Loss.) And it wasn't enough. (See JDSU Writes Off Billions More.)

Should JDSU's finance department reduce goodwill to zero, they'll avoid those kinds of surprises.

JDSU hasn't had any big buys lately, so the bulk of the goodwill in question probably goes back to 2005 and the $760 million purchase of Acterna. There's probably a bit of Picolight in there, too, since that was a $115 million deal, most of it in stock. (See JDSU Buys Into Testy Market and JDSU Picks Up Picolight for $115M.)

JDSU's stock was unchanged in after-hours trading.

— Craig Matsumoto, West Coast Editor, Light Reading

DarkWriting 12/5/2012 | 4:13:17 PM
re: JDSU Cuts Goodwill JDSU has eliminated all the transceiver based jobs at the former Picolight facility. Nothing left there but VCSEL people. That's the reason why JDSU bought them in any case so this is not a surprise. Good luck to those still there.

lightnesmonster 12/5/2012 | 4:13:13 PM
re: JDSU Cuts Goodwill Ahhh!! The VCSEL!

Perfect example of an America perfected technology that could have changed the world, but was shunned by the closed minds of the Bell Heads. But the VCSEL manufacturers (in some cases) Yes Men were also responsible and undersold the VCSEL, not wanting to dull the point on the top of Bellcore's many heads.

I guess $2.00 lasers and higher product margins are too much like CWDM to an DWDM air head.

Anyone want to open a thread on Geithner? Opps! I guess I just did.

I'll be reducing my tax payment for poor performance of the IRS, INS and SEC, just as the government wants to reduce CEO compensation. Its good to set an example! And I encourage you to do the same. (Just think of all the guns, ammo, and Bibles we can buy with all that left over cash).

Rant Over and Out!

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