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To: Robert Rose who wrote (117138)	2/7/2001 6:28:00 PM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Rob, Go easy on Fowler I think he's taken a hit. I like Mark, but emotionally he's all over the place. BTW EK tells it like he thinks it is. Trust me. Btw I think Mark has got too much money invested in JDSU. >OTTAWA, Feb 7 (Reuters) - Shares in JDS Uniphase Corp. (T.TSE:JDU) (NASDAQ:JDSU), the world's No. 1 supplier of fiber-optic components, fell more than 6 percent on Wednesday after an analyst trimmed his earnings estimates for the company due to near-term growth challenges. WR Hambrecht & Co. analyst Jim Liang maintained a buy recommendation, but scaled back his revenue growth forecast for the third quarter over the second quarter to 5.5 percent from 7 percent. He also cut his forecast for fourth quarter revenue growth to 7.5 percent from 9 percent and said JDS might revise its own forecasts lower too. Liang shaved back revenue estimates for 2001 to $3.74 billion from $3.78 billion and earnings to 81 cents per share from 82 cents per share. He cut 2002 revenue estimates to $5.44 billion from $5.54 billion and earnings to $1.05 from $1.07. The analyst cited a recent warning of order cancellations by semiconductor company Applied Micro Circuits Corp. (NASDAQ:AMCC), whose products JDS buys and incorporates into its optical transmission and receiving technology. He also believes that Nortel Networks Corp. (NYSE:NT), the world's No. 1 supplier of fiber-optic network equipment, is "aggressively" reducing stockpiled inventory of JDS products. "We reiterate our buy recommendation as we believe the current share valuation already reflects the near-term growth deceleration, but does not yet fully reflect the potential synergies generated for the combined JDS Uniphase and SDL (NASDAQ:SDLI)" Liang wrote. JDS on Tuesday won approval from U.S. antitrust authorities for its $17 billion takeover of SDL, the world's No. 2 components supplier. Antitrust authorities approved the deal after JDS agreed to sell for up to $3 billion a Zurich manufacturing plant to Nortel, a major component consumer. Its stock rose up to 6.5 percent in Tuesday intraday trade, before slipping back to end some 3 percent higher. JDS said it will update its forecast on Feb. 12 or 13 to reflect the SDL acquisition, a bigger supply deal with Nortel, and to exclude sales from the Zurich plant and sales between JDS and SDL. Salomon Smith Barney analyst Tim Anderson maintained his outperform rating on JDS. He said the enhanced Nortel supply deal did not alter short-term concerns over JDS customers working through inventory and uncertainty over how much carriers will spend on network equipment. Liang told Reuters that JDS may pull back its earlier estimates. "Given the incremental weakness we have seen in the last couple of weeks, our inclination is there is a likelihood that when the company provides updated financial guidance next week they may have to scale, or trim slightly down, from their previous sequential growth guidance," he said. JDS has said it expects third quarter revenues to grow 7-10 percent over the second quarter and earnings equal or slightly better than second quarter earnings of 21 cents per share. The company also forecast 2001 revenues to come in at the low end of a previously-stated growth forecast of 115 percent to 120 percent. UBS Warburg analyst Joseph Wolf wrote that he expects JDS to leave earnings guidance "relatively" unchanged. He estimates that JDS in combination with SDL will report fiscal 2001 sales of $3.97 billion and calendar 2001 sales of $5.23 billion. "We expect a positive impact to gross margin due to SDL's high corporate gross margin," he wrote, citing SDL's margin of 56.8 percent in the fourth quarter. Shares in JDS closed at $48-1/4 on Nasdaq and C$75.25 on the Toronto Stock Exchange on Wednesday, while SDL lost 7 percent to end at $182-3/8.