Good news, bad news from JDSU

The good news for JDS Uniphase in the first quarter of FY2006 (ended September 30) is that revenues were $258 million, up from $195 million in the same quarter a year ago, and the company saw its strongest gross margin improvement in three years, from 17.6 to 32%.

Nov 15th, 2005

SAN JOSE, CA - The good news for JDS Uniphase in the first quarter of FY2006 (ended September 30) is that revenues were $258 million, up from $195 million in the same quarter a year ago, and the company saw its strongest gross margin improvement in three years, from 17.6 to 32%. The bad news is that first-quarter year-over-year net loss was $67 million, up from $36 million in 2005, and the company plans to cut 380 jobs in North America and close two plants-80 from its Rochester, MN, site, which will close by the end of June 2006, and another 300 in Ottawa, where some product R&D will remain.

Still, JDSU is optimistic. The company anticipates second-quarter revenues to be $300 million to $320 million, slightly higher than analyst forecasts of $297 million.

“Reflecting JDSU’s more diversified business model, we achieved significant gross margin improvement driven by the strong performance of our recently acquired communications test and measurement business,” said Kevin Kennedy, CEO of JDSU. “We remain on track to achieve $88 million of previously announced annualized cost savings by the end of fiscal 2006.”

According to Kennedy, the communications market is more favorable than it has been in some time, as increasing adoption of broadband services and the expansion of fiberoptic networks by service providers such as SBC and Verizon continues to drive demand for JDSU’s more highly integrated and intelligent modules and subsystems.

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