dailynews.yahoo.com
Any wonder why people are so bullish. THat article i just posted has the comments from Nortel as well. In this article, they are only guessing on good numbers from NT in this area.
Tuesday October 26 4:20 PM ET
Market Bets JDS Will Beat Expectations
By Susan Taylor
OTTAWA (Reuters) - Investors betting that fiber-optic equipment maker JDS Uniphase Corp (Nasdaq:JDSU - news). will continue its track record of beating expectations when it reports first-quarter results sent the stock to new highs Tuesday.
Over the last week, the stock has soared an impressive 24 percent, ending at C$216 Tuesday from a close of C$174.50 on the Toronto Stock Exchange on October 19. The previous high this year was C$207.50.
On Nasdaq, the issue was up 25.5 percent with a value of 146-13/16 Tuesday from a close of 116-15/16 one week ago. The previous 52-week high was 140-9/16.
Analysts agree that JDS is likely to surpass the 25 cents per share consensus estimate of 24 brokers polled by First Call/Thomson Financial.
The question now is by what degree it will better estimates.
''I think there is in the stock, implicit in the valuation, an expectation that they will beat the numbers,'' said James Kedersha, analyst at SG Cowen & Co. in New York. ''It's very strong recently.''
The product of a June 30 merger between San Jose, California.-based Uniphase Corp. and Ottawa-area based JDS FITEL Inc., the firm supplies components to the red-hot fiber-optic network market.
The company develops equipment that boosts the capacity and performance of those networks, which carry data on light wavelengths.
''There is an expectation in investors' minds that this is the future -- optics is the future -- and JDS Uniphase is one of the leading providers of the components for those systems,'' said Patrick Houghton, analyst at Sutro & Co. in San Francisco.
Strong prospects suggest that the firm's guidance of a $1.11 per share profit in fiscal 2000 and $1.59 in 2001 are too low, he added. ''The going-forward numbers are rather ridiculously conservative,'' Houghton said.
Analysts will keep a keen eye on revenue growth in the quarter, hoping to see at least a 15 percent improvement over the previous fourth quarter.
Despite a blistering demand, production levels are not expected to be a problem.
''They said yields in most of their areas have been up,'' Kedersha said. ''The news sounded pretty good.''
Signals from key customers also appear promising.
Murray Hill, New Jersey-based Lucent Technologies Inc (NYSE:LU - news)., which represents 17 percent of JDS sales, reported a 50-percent increase in fourth quarter profits Tuesday morning.
Brampton, Ontario.-based Nortel Networks Corp (NYSE:NT - news)., which accounts for 10 percent of JDS sales, is expected to report a strong third quarter after market close Tuesday.
Further details of JDS's corporate shopping spree during the quarter are also expected to be outlined in a conference call Thursday.
JDS struck a $400-million deal to buy Trenton, New Jersey-based EPITAXX Inc. on October 4 and bought tiny component developer Ramar Corp. on October 18, but the terms of that deal were not disclosed.
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