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Non-Tech : EARNINGS REPORTING - surprises, misses & more -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (130)	7/23/2000 3:08:48 AM
From: 2MAR$	Read Replies (1) \| Respond to of 762

7/20...SDLI Pumps Up Growth Ahead of Blockbuster JDS Merger By Jay Ritter While it's hard to believe things could get any better, SDL's (Nasdaq: SDLI - news) white-hot optical components business accelerated to almost unheard of levels in the second quarter. SDL reported June-quarter results that would have defied belief if the company hadn't already raised guidance once in the middle of the quarter. The company reported a 156% revenue increase to $111 million (up 53% sequentially). Before acquisition-related charges, earnings came in at $0.33 per share versus $0.09 per share in the June, 1999 quarter and $0.19 per share in the first quarter of 2000. Even excluding acquisitions, three of which closed during the quarter, SDL's growth was very robust and well into triple digits. Profit margins and cash flow also improved handsomely, as the company benefited from a combination of manufacturing efficiencies and strong profits from recently acquired companies. Shipments of communications components for both terrestrial and undersea fiber optic systems were extremely strong. SDL's customer base continued to expand and the company stuffed its product pipeline with enough new products to fuel its growth well into the future. Demand is so strong that SDL plans to increase capacity at most of its operations by a factor of five -- and it's less than a sure bet that the company will be able to meet customers' demand even then. It's no wonder optical-component giant JDS Uniphase (Nasdaq: JDSU - news) wants to buy SDL. SDL is growing even faster than JDS, and is well positioned in several key emerging product categories that will be important components in the next-generation optical networks that will power the Internet bandwidth explosion. While concerns about Government antitrust scrutiny surrounding the JDS/SDL deal haven't gone away, the companies are confident that it will be approved by year-end, despite the overlap between their respective product lines. Lucent's (NYSE: LU - news) decision to spin off its microelectronics segment might actually help JDS support its case that there is plenty of competition, and that the optical components playing field will remain challenging. Despite its obvious fundamental appeal, the stock's sky-high valuation makes it a candidate for only the most aggressive investors. Moreover, the shares could be especially volatile as the company awaits approval from Government regulators. Jay Ritter can be reached at jay_ritter@morningstar.com.