JDS FITEL SHARES SOAR
OPTICAL ISOLATOR VENTURE WITH
CORNING BUOYS FIRM'S STOCK
By SUSAN TAYLOR -- Ottawa Sun
JDS Fitel Inc. shares shot up $1.45 yesterday on the heels of a
new joint venture and a U.S. competitor's wildly successful public
offering.
That boost sets a new 52-week record for the firm, whose
shares sank to $12.45 on the TSE in early October
Under a deal with New York-based Corning Inc., JDS will
design, develop and manufacture optical isolators for that firm's
fiber amplifiers.
Isolators are used reduce reflections that can cause interference
or instability on optical transmission lines.
The two companies will also market the isolators to other
companies.
"It's potentially very positive," said Gurinder Parhar, an analyst
with HSBC James Capel Canada Inc. "It's a significant expansion
of a small product line."
Corning is a major player in the industry. The publicly-traded
firm, which had 1997 sales of $3.5 billion, has 17,500 staff and
36 manufacturing facilities world wide.
"It creates a volume demand for isolators that leads to an
economy of scale," said JDS spokesman Marc Rene de Cotret.
"It's certainly good for business and strategically makes very
good sense for us."
Meanwhile, the entire sector is basking in the glow of
Wednesday's initial public offering of California-based E-Tek
Dynamics Inc.
The firm's shares soared on the U.S. Nasdaq to close at $26.25
after opening at $12. That serves to draw investors' interest to
the sector and competing firms, such as JDS.
"The entire fibre optic industry in the last three weeks has been
on fire," said Parhar.
But JDS' recent return to glory doesn't come strictly on the coat
tails of E-Tek's performance, he said.
Recently, JDS has come out with a string of announcements.
"They've had a whole bunch of very good news," Parhar said.
Late last month, the firm bought international optical equipment
manufacturer Akzo Nobel Photonics in a deal worth at least $19
million. That deal helps boost JDS' position as a one-stop shop in
optical networking products.
JDS also announced it entered a strategic alliance with
AlliedSignal Inc. to exploit technology purchased from Akzo.
Akzo develops technology for optical switches with no movable
parts.
The firm is expected to release its upcoming second quarter
results Jan. 13. A group of 12 brokers on First Call Corp.
project JDS will earn 21¢ a share profit. |
