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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (3112)	12/17/1999 7:32:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 24042

JDS Uniphase first annual meeting turns to love in Nothing but good news: Unprecedented demand from customers Jill Vardy Financial Post OTTAWA - JDS Uniphase Corp. will be the world's first $2-billion fibre-optic company, and its huge manufacturing expansion next year will help it get there, Kevin Kalkhoven, the chief executive, told investors yesterday at an annual meeting turned love-in. The merged product of JDS Fitel and Uniphase Corp. reported more than $1-billion (US) in sales last year, and the only impediment to doubling that revenue rate is its ability to meet customer demand, said Mr. Kalkhoven. "We will be the first $2-billion run rate company in this industry" thanks to a massive expansion of its manufacturing capacity and the six acquisitions JDS Uniphase has made since it merged last July. Mr. Kalkhoven and Jozef Straus, the company's president, had nothing but good news for shareholders gathered at the first annual general meeting of the combined company. Next week will see the second two-for-one stock split since the two fibre-optic firms joined. News of the impending split and expansion plans pushed JDS shares up $29 to $369 in Toronto and up $21.25 (US) to $249.87 (US) on Nasdaq. Its market capitalization is now more than $40-billion (US). "If the 1970, '80s and '90s were the generation of silicon, the 1990s and 2000s and beyond are going to be the generation of light," he said. "We are right in the middle of a vortex of activity." Mr. Kalkhoven said the goal is to double JDS's manufacturing capacity. That's why JDS will spend $125-million (US) to add 600,000 square feet to its global manufacturing facilities next year. The largest single expansion will take place in Ottawa, where the company will build R&D, manufacturing and office space in the third phase of its main campus facility. Plants will also be expanded in Australia, England, Pennsylvania, Connecticut, New Jersey and Florida. It's critical for JDS to expand to meet the blistering demand for its fibre-optic products, used by telecommunications equipment manufacturers to build high-speed networks for data traffic. The growth of Internet use has made it necessary to greatly increase capacity on networks while at the same time reducing the cost of these networks. The mood at the meeting was positively jovial, with several shareholders standing up to thank the two company heads for its performance. Even the formal speeches were punctuated with jokes. Mr. Kalkhoven, who said he is often mistaken for Mr. Straus, put on a beret similar to the trademark headgear worn by JDS's founder. To differentiate himself from his co-chairman, he replaced it with a Santa hat -- and wore it throughout his presentation. Mr. Straus said JDS is seeing unprecedented demand from customers -- giant telecommunications equipment makers such as Nortel Networks Ltd. and Lucent Technologies Inc. "Our biggest challenge, or opportunity, is to meet the demand our customers have," he told shareholders. "We need to anticipate, to be partners for our customers. The only risk is that we'll mess up." Analysts don't seem to expect the company to mess up. Michael Urlocker, technology analyst at Scotia Capital Markets, said JDS is his top stock pick. "The risk is you're buying an expensive stock, but I think we're at the early stages of what will be a high-growth company. And I think it's the best technology company in Canada," he said. "There's huge demand for this company's products. And I don't see that going away." Others agree. JDS was maintained "accumulate" yesterday by analyst Emil Savov at Goepel McDermid Inc., with a 12-month target price of $245 (US) a share.