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Test & Measurement

JDSU Surges After Q2

Shares of JDSU (Nasdaq: JDSU; Toronto: JDU) are up 30 percent this morning as the company blew past analyst estimates with yesterday's second-quarter earnings report.

JDSU's non-GAAP net income for the second quarter, which ended Dec. 31, clocked in at 22 cents per share, surpassing the 12 cents analysts were forecasting, according to Thomson First Call .

JDSU shares were up $2.93 (28.9%) at $13.07 in midday trading.

The company's numbers are a bit padded, as JDSU enjoyed "some overachievement due to seasonality," Kennedy said on a conference call with analysts yesterday.

Specifically, test and measurement usually surges at the end of the calendar year -- and it's got healthier margins than JDSU's optical-communications segment. Test and measurement represented 49 percent of revenues, while JDSU's traditional optics business came in at 33 percent.

JDSU officials noted that test and measurement was the one segment that recorded a book-to-bill ratio less than 1, a sign that revenues will drop this quarter.

Perhaps more important, JDSU didn't show any signs of being hobbled by the U.S. economy.

"We continue to see favorable end-market indicators for broadband services and network buildouts," Kennedy said.

JDSU even had some good news to deliver on the optics side, where operating margins reached positive territory -- 7.6 percent -- for the first time in a year.

JDSU's results might serve as a balm for investors stung last week by Avanex Corp. (Nasdaq: AVNX), which trimmed its third-quarter forecasts to $48 million from an expected $52 million. Avanex shares fell about 10 percent the following day. (See Avanex Reports Q2.)

JDSU needed the boost, too. Like many stocks, it's been battered in the past month as effects of the subprime lending bubble spread. Since Jan. 1, JDSU shares were down 24 percent, closing yesterday at $10.16.

JDSU was profitable for its second quarter. By generally accepted accounting principles, the company reported net income of $21.2 million, or 9 cents per share, on revenues of $399.2 million, compared with the previous quarter's losses of $6.9 million, or 3 cents per share, on revenues of $356.7 million.

For its third quarter, JDSU predicts revenues of $380 million to $402 million, on par with the $390 million analyst consensus reported by Thomson.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:48:30 PM
re: JDSU Surges After Q2 Forgot that Finisar's earnings were today. Their stock was up around 12% this morning, maybe in sympathy with JDSU, and finished up 6% and change.

Now it's up 9% after hours following the earnings report...
Steve0616 12/5/2012 | 3:48:29 PM
re: JDSU Surges After Q2 This was a preannouncement. Looks very good.
Pete Baldwin 12/5/2012 | 3:48:29 PM
re: JDSU Surges After Q2 yes, *pre*-announcement. Thanks, I didn't look very hard -- My mind was on prepping for Cisco's earnings today.

(Speaking of which: Yikes.)
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