RS on JDSU
JDS Uniphase Corporation [NASDAQ: JDSU $28.00]
F2001E EPS: $0.66, down from $0.72
F2002E EPS: $0.61, down from $0.78
BUY
Arun Veerappan, Communications Components/Semiconductor Devices
“After the close yesterday, JDS Uniphase officially announced that it expects to report financial results for its fiscal 2001 below Street consensus expectations,” said Veerappan. “For the second time this quarter, we have updated our financial model to reflect the continued weakness in the economy and issues related to inventory at system OEMs and service providers. We had previously proactively lowered our estimates on JDS Uniphase on February 16 after Nortel pre-announced disappointing results for the March quarter and for the full year of C01. We are now lowering our Q3:01 (March) revenue from $976 million to $923 million, and decreasing our EPS estimate from $0.17 to $0.14. While it appears that we are keeping revenues flat sequentially for JDS Uniphase for both the March and June quarters at approximately $923M, in actuality we are forecasting that JDS Uniphase will decline about 6% Q-Q for both the March and the June quarters even as SDL layers on for both the March quarter (where JDS Uniphase will be able to get 50% of SDL's revenue for the March quarter since the acquisition only closed mid-way through the quarter) and for the June quarter. For F01 (June), we are lowering our EPS estimate from $0.72 to $0.66 on revenue of $3,558 million. For F02, we are lowering our EPS estimate from $0.78 to $0.61 on revenue of $4,117 million. For C01, our new estimates are EPS of $0.55 on revenue of $3,757 million. For C02, we have estimates of $0.72 on revenue of $4,788 million. We believe that JDS Uniphase's announcement is in keeping with current market conditions. But we note that visibility is rather low and to that extent, our estimates for the June quarter could be at risk should the current difficult business environment prevail. Overall, we continue to believe that JDS-Uniphase remains the most comprehensive end-to-end supplier of optical components, and as such, believe it will prove to be a beneficiary of an up-tick in demand as and when it materializes.”
Jack |
