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JDS tops estimates
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October 26, 2000: 7:41 p.m. ET
Fiber-optic component supplier exceeds profit, earnings expectations
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NEW YORK (CNNfn) - JDS Uniphase, the world's largest supplier of components for fiber-optic networking systems, reported a fiscal first-quarter profit Thursday that topped expectations on revenue that rose more than 170 percent from the same period a year earlier.
And executives at JDS raised estimates for the fiscal second quarter and all of fiscal 2001 on expectations of continued strong demand for their products.
After the closing bell, JDS said it earned $177 million, or 18 cents per share, excluding special charges. That compares with 8 cents per share during the same period last year and is two cents better than the 16 cents-per-share profit analysts had expected the company to post, according to a survey conducted by earnings tracker First Call.
Revenue for the quarter was $786 million, up from $290 million during the same period last year. Analysts had generally expected JDS to log about $756 million in sales during the quarter, according to First Call.
Including merger and other one-time charges, JDS reported a loss of $1 billion, or $1.07 per share.
JDS (JDSU: Research, Estimates) shares rose $3.44 to $$74.44 in Nasdaq trade ahead of the earnings announcement, which was made after the markets closed. They rose another $5.31 to $79.75 in after-hours trade.
The company's stock, as well as the stocks of other fiber-optic-related companies, had been hit hard earlier in the week.
 On Wednesday JDS shares tumbled about 25 percent. That decline came after Nortel Networks (NT: Research, Estimates), the leading supplier of fiber-optic networking equipment, warned that its customers had amassed inventories amid tight supply of optical systems, creating a bottleneck in the distribution channel.
Several analysts chimed in as well on Wednesday, warning that it could take several quarters for Nortel's customers to work through that excess inventory. And that came on the heels of disappointing fiber-optic system sales from Lucent Technologies, as well as a fourth-quarter earnings warning from Lucent earlier in the week.
Combined, Lucent and Nortel represented roughly 36 percent of JDS' revenue in the fiscal fourth quarter of 2000.
 In an interview on CNNfn's Moneyline News Hour Thursday, JDS chief executive Jozef Strauss said the fiber optics business is not slowing and the company will continue to grow as new entrants join the fray. [182K WAV or 182K AIFF]
Phone companies and Internet service providers are increasingly deploying optical networking systems to carry the massive quantities of data fueled by the Internet. JDS sells components such as filters and pump lasers that are used to build those optical systems.
Bullish as its ever been
Executives at JDS in Ottawa hosted a conference call to provide further details about the latest results and provide an outlook for the coming quarter. However, a company spokesman said Thursday afternoon that an overwhelming number of callers had overloaded the circuits designated for that call, making it inaccessible to many.
Reuters reported Thursday evening that during the call, the company raised its fiscal second-quarter earnings-per-share forecast to between 19 and 20 cents from 17 cents. It also said earnings per share in all of fiscal 2001 will be 80 cents, compared with a previous forecast of 70 cents.
The company also expects fiscal second-quarter revenue to rise in the "high-teens" while sales for all of 2001 are expected to be up 115-120 percent over the $1.77 billion it logged in 2000.
That's up from a previous forecast of 90 percent revenue growth for fiscal 2001, according to J.P. Morgan analyst Charlie Willhoit.
"JDS was as bullish as it's ever been," Willhoit said in an interview with CNNfn.com after the call Thursday evening.
JDS has a history of making positive forward statements, and some analysts earlier Thursday had been skeptical of the company's ability to accurately forecast what's going to happen in its business in the next six months, citing the lack of visibility created by the problems reported by Nortel and Lucent.
But in the call, JDS executives stressed to the analysts that demand for their products has not been diminishing, but in fact is continuing to rise, with any weakness from Nortel and Lucent outweighed by orders from newer customers, according to Willhoit.
"They said companies like Nortel, Lucent and Alcatel are all still good customers for them, but newer customers like Juniper, Cisco and Sycamore are ramping really fast," he said.
"We thought that the Nortel sell-off has been largely overblown, and we think the market overall will be relieved by this kind of guidance," Willhoit added,
Itself the product of a merger between JDS Fitel Inc. and Uniphase Corp. in 1999, JDS has been on an acquisition tear, taking more than six companies into its fold since its inception. SDL Inc., which JDS Uniphase agreed to buy for $41 billion last July, reported its latest results last week, beating the Street's estimates by 7 cents on revenue that tripled from the same period last year. 
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