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To: Dealer who wrote (26732)	7/26/2000 8:58:07 PM
From: Dealer	Read Replies (1) \| Respond to of 35685

JDSU--Morningstar.com JDS Uniphase Is the Photonics King By Jay Ritter Triple-digit growth doesn't come cheap. Still, investors of all stripes would be wise to put JDS Uniphase (Nasdaq: JDSU - news) on their radar screens, given its leadership status and growing clout in the photonics revolution. Capping a remarkable fiscal year, the company announced superb June-quarter results Wednesday after the market's close. Earnings of $0.14 per share (before merger-related charges) were up 33% from the March quarter and were $0.02 per share better than Wall Street expected. Revenues of $524 million were up 33% from the previous quarter and up 173% from a year ago. Pro forma sales, including the combined operations of JDS Uniphase and recently acquired E-Tek, were $641 million for the quarter and $1.77 billion for the year. The company once again upped its revenue-growth forecast for fiscal 2001, to 90% from 75%. With E-Tek in the fold and SDL (Nasdaq: SDLI - news) in the hopper, JDS is training its sights on its biggest problem: increasing output. Like most of the leading optical players, JDS' near-term growth is limited only by its ability to crank out additional parts. In an effort to keep up with demand, the company has made continuous capacity expansion a major strategic initiative. Through a combination of facilities expansion, process improvement, and selected outsourcing to companies such as Celestica (NYSE: CLS - news), JDS plans to increase unit production of optical components and modules fourfold every 18 months. While the company didn't specifically address questions about its pending acquisition of SDL, management appears confident that the deal will survive what could be intense government antitrust scrutiny. Nevertheless, the blockbuster deal appears to have raised concerns from key customers such as Nortel Networks (NYSE: NT - news), and uncertainty surrounding the deal is likely to add to the stock's volatility. At more than 200 times next year's estimated earnings, the stock is extremely pricey. Still, the company has emerged as a technology bellwether with growth prospects that few can match. The stock is worth a long look from aggressive investors, particularly on dips below current valuation levels. Jay Ritter can be reached at jay_ritter@morningstar.com. Visit www.morningstar.com daily for in-depth analysis of stocks, funds, and sectors in the news.