Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (5106)	1/27/2001 8:58:24 PM
From: Mark Fowler	Read Replies (3) \| Respond to of 57684

Reuters:JDS Stock recovers on long-term prospects www0.mercurycenter.com. Posted at 12:48 p.m. PST Friday, Jan. 26, 2001 JDS Stock recovers on long-term prospects BY SUSAN TAYLOR OTTAWA (Reuters) - Shares in JDS Uniphase Corp. (JDSU.O), the world's No. 1 supplier of fiber-optic components, came back to life on Friday as analysts continued to recommend the stock for its long-term prospects even though they cut their earnings estimates for the company. Investors hammered JDS shares on Thursday, whacking 13 percent from their value, after Corning Inc. (GLW.N) cut its own earnings forecasts and warned the telecommunications market may soften. JDS Uniphase shares did not completely recover on Friday from that setback, but rose nearly 8 percent to $59-1/2 on Nasdaq on Friday more than 6 percent to C$92.00 on the Toronto Stock Exchange. JDS's own reduced estimates for its near-term performance were not as bad as many investors had feared and that may have sparked a ``modest relief rally'' for the company's stock, said Jim Liang, an analyst at WR Hambrecht & Co., who kept his buy recommendation on JDS, but marginally reduced earnings estimates. Elsewhere in the sector on Friday, shares in Corning slipped a further 3 percent, bringing their two-day decline to 22 percent, while components supplier Oplink Communications Inc. (OPLK.O) lost 4.5 percent. Avanex Corp. (AVNX.O) added a little more than 3 percent. High-flying JDS Uniphase, which has been struggling to keep pace with white-hot demand for its products, blamed near-term uncertainty about telecoms companies' spending plans and customer inventory adjustments for its reduced forecasts. It said it expects third-quarter revenues to grow 7-10 percent above the second quarter, a dip from expectations of about 11-12 percent. Pro forma earnings are forecast to be equal to, or slightly better, than those of the second quarter. The company also said it expects 2001 revenues will come in at the low end of its previous forecast of 115% to 120% growth. Earnings per share are forecast at 82 cents. Merrill Lynch lifted its 2001 earnings forecast for JDS to 81 cents a share from 80 cents, but cut its revenue target to $3.8 billion from $3.9 billion. For 2002, Merrill said earnings will remain at $1.02, while it scaled back revenue forecasts to $5.4 billion from $5.6 billion. Deutsche Banc Alex. Brown kept its buy rating, raised its 2001 earnings estimate to 82 cents a share from 80 cents and reduced its 2002 forecast to $1.12 a share from $1.14. UBS Warburg, which trimmed its forecasts, also cut its stock target to $75 from $160 but maintained a buy rating. JDS may be better positioned than Corning to capitalize on telecoms carrier spending in the year ahead, said Tim Anderson, optical components analyst at Salomon Smith Barney. ``JDS is exposed to carriers lighting up their networks -- putting in optical components... Corning's exposure is on the fiber side of the business -- laying the network,'' he said. ``We've heard from a lot of carriers that, at least in 2001, what they will be doing more of is lighting versus laying.'' In a conference call with analysts on Thursday, JDS Uniphase expressed confidence its traditional growth rates would return. ``I can assure you one thing: If carriers don't invest in adding capacity and adding bandwidth, the whole Internet is going to look like the California electrical market,'' said chief financial officer Anthony Muller. ``This money is going to get spent, but the precise timing over the next quarter or one and a half quarters is somewhat uncertain. Shares in JDS Uniphase may also still be suffering from a second delay to its timetable to close an $21 billion acquisition of SDL Inc., the world's No. 2 supplier of fiber-optic components. ``JDS Uniphase has been in the penalty box because of the pending merger with SDL,'' said Mark Langley, analyst at Epoch Partners. JDS has submitted a new proposal to antitrust authorities responding to concerns about the deal, which would give it an estimated 70-80 percent of the market for pump lasers, which boost the speed of optical signals on a fiber optic network.