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To: Dealer who wrote (26771)	7/27/2000 11:57:47 AM
From: Dealer	Respond to of 35685

JDSU--Thursday July 27 11:04 AM ET JDS Uniphase Stock Continues Hot Market Streak By Susan Taylor OTTAWA (Reuters) - Market fever that sent JDS Uniphase Corp. (NasdaqNM:JDSU - news)(Toronto:JDU.TO - news) shares to a record-smashing trade volume on Wednesday remained hot on Thursday amid a string of analyst upgrades for the fiber-optic components maker. Shares in JDS Uniphase, which posted better-than-expected fourth-quarter results and was added to the S&P 500 index after market close on Wednesday, added nearly 2 percent in early trade on the Toronto Stock Exchange on Thursday. The issue gained C$3.50 to C$195.50 on the Toronto exchange on Thursday, but it slipped by 2-7/16 to 133-1/2 on the Nasdaq following a buying binge on Wednesday. The action follows a massive movement of 200.4 million shares of JDS Uniphase on the Nasdaq on Wednesday as fund managers who track the S&P 500 scrambled to add the stock to their funds. The JDS Uniphase trade volume breaks a previous record of 171.8 million shares set by Oracle Corp. (NasdaqNM:ORCL - news) in 1997. The euphoria around JDS, the world's largest supplier of components for fiber-optic networks, continued on Thursday as analysts lifted their projections for the company's revenues and profits. Analysts at such brokerages as Merrill Lynch, Deutsche Banc Alex. Brown, WR Hambrecht & Co., Credit Suisse First Boston and PaineWebber all lifted their estimates on JDS after the company reported strong fourth-quarter results and raised forecasts. Merrill Lynch analyst Tom Astle, who set a 12-month stock price target of $160 on Thursday, lifted his fiscal 2001 earnings per share estimate to 69 cents from 61 cents and raised his 2002 forecast to 90 cents from 83 cents. Deutsche Banc Alex. Brown analyst Raj Srikanth raised his 2001 profit estimate to 68 cents per share from 61 cents and lifted his 2002 forecast to $1.01 from 90 cents per share. JDS Uniphase reported net income, excluding one-time costs, of $114 million, or 14 cents a share, on revenues of $524 million after the market's close on Wednesday. In the year-earlier period, the pro forma combined profit of JDS Fitel and Uniphase Corp. -- which merged in June 1999 -- was $41 million, or 6 cents a share, on revenues of $192 million. The average estimate carried by First Call/Thomson Financial was a profit of 12 cents per share, before extraordinaries, from a group of 28 brokers. Astle, who maintained his accumulate/buy rating on the stock, also raised his revenue forecast for JDS Uniphase for 2001 to $3.5 billion from $2.45 billion and for 2002 to $5 billion from $3.5 billion. Srikanth, who reiterated a strong buy on JDS, said JDS is positioned to enjoy strong markets that show no signs of abating. He lifted his 2001 sales forecast to $3.4 billion from $2.5 billion and raised 2002 to $5.5 billion from $2.5 billion. ``The only constraint the company faces is its ability to raise capacity and meet demand. Backlog at the end of the quarter was a record $931 million,'' Srikanth wrote in a research note. ``The optical components industry continues to be supply constrained, as confirmed by Nortel, Lucent and other systems vendors, and JDS Uniphase with its size, breadth of products and execution skills remains the unquestionable leader.'' Expansion-hungry JDS Uniphase, which closed its acquisition of E-Tek Dynamics Inc. on June 30, said on Wednesday that it expects quarter-over-quarter sales growth in the high-teen percentage, up from earlier forecasts of 15 percent growth. ``The only red flag in the quarter would be a softening of gross margins but we believe it is premature to call this a trend,'' Astle wrote in his report. ``In addition to the strong results and outlook, we believe the stock will be impacted by any integration issues at the company, the addition of the company to the S&P 500, DOJ (Department of Justice) and customer reaction to its SDL (Inc (NasdaqNM:SDLI - news)) merger.'' Headquartered in San Jose, California, with operations in the Ottawa area, JDS Uniphase recently announced plans to buy rival SDL Inc. (SDLI.O) in a stock deal valued at about $47 billion that is now under review by U.S. antitrust authorities.