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Technology Stocks : Ciena (CIEN)
CIEN 191.74-1.3%Nov 14 4:00 PM EST
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To: James Fulop who wrote (10590)3/7/2001 12:03:55 PM
From: James Fulop  Read Replies (1) of 12623
 
Ciena mentioned in CSFB's comments on JDSU...(courtesy the SI JDSU thread...)

Message 15461311

>>JDS Uniphase (JDSU-$28-Cap $37.6B-Buy)
Pre-Announced After The Close To Reflect Lack Of Near Term Visibility FY01E: $0.62, FY02E: $0.73

· As was generally anticipated, JDSU indicated that rev and EPS in both FQ3:01 and FQ4:01 are expected to be $925M and $0.14, respectively; This compares to our estimate of $950M for both quarters and EPS of $0.17 and $0.14 for FQ3:01 and FQ4:01, respectively; Decreasing FQ3:01 sales to $925M and EPS to $0.14 and FQ4:01 sales to $875M and EPS to $0.14; Adjusting FY02 sales estimate to $5.1B from $5.4B and EPS to $0.73 from $0.80.

· Though co. flat lined guidance for top-line growth in H2:F01, these figures imply a more difficult June qtr (similar to comments by NUFO on 2/5/01) given that it is the first full qtr to include SDLI results; Our FQ3:01 sales est. assumes JDSU base business (excl Zurich) is down 5.8% seq and SDLI div (excl inter-co. rev) is down 5%; In FQ4:01, we est. JDSU base decreases 11% while SDLI declines 10%; We anticipate positive seq grwth to resume in FQ1:02.

· Pre-announcement a function of the continued lack of near-term visibility in the optical component/modules industry as a substantial inv correction continues; The demand environment for passives remains weaker than that of actives and we suspect that pricing in passives has deteriorated at the margin; On a positive note, JDSU mgmt indicated that shipments into metro mkt remain strong (positive for metro focused companies such as ONIS and also CIEN given its two incremental product cycles through CoreDirector and thin-SONET platform to be acquired through Cyras).

· JDSU trading at $26.94 after mkt, which equates to a P/E of 40.3x our CY2001 projection and 32.5x our CY2002 forecast; Maintain BUY rating to reflect our favorable view on the long term fundamentals of the optical component/modules business and JDSU’s industry leading position;

Price target (9-12mo) is $50.<<

PS Additional color: CSFB was Cyras' advisor for the Ciena/Cyras acquisition, so perhaps it may not exactly be neutral here...<g>
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