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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: larry pollock who wrote (10168)	3/6/2001 6:51:24 PM
From: Robert	Read Replies (1) \| Respond to of 14638

I'm wondering if there are any bets out there on when NT will warn again...I am thinking another week or two... Robert

To: larry pollock who wrote (10168)	3/6/2001 7:51:06 PM
From: larry pollock	Read Replies (2) \| Respond to of 14638

JDS cuts forecast amid weakening demand (UPDATE: Adds analyst comments. All figures in U.S. dollars unless noted) By Susan Taylor Ottawa, March 6 (Reuters) - JDS Uniphase Corp. (Toronto:JDU.TO - news) (NasdaqNM:JDSU - news), the world's No. 1 supplier of fiber-optic telecoms components, lowered its forecasts for third- and fourth-quarter performance again on Tuesday, citing a weakening U.S. economy and waning customer demand. The markets had been waiting for the other shoe to drop after JDS told Reuters it understood why analysts were cutting estimates below corporate forecasts amid a spending slowdown that was underscored by a dramatic warning by Nortel Networks Corp. (NYSE:NT - news) (Toronto:NT.TO - news), JDS's largest customer. The company said after the markets closed on Tuesday it now expects third-quarter pro forma earnings per share of 14 cents and revenues of $925 million, below the firm's previous forecast of earnings of 17 cents a share and revenues of about $1 billion. JDS said it expects fourth-quarter results to match or slightly exceed third-quarter earnings and revenues. Analysts polled by research firm First Call/Thomson Financial had expected third-quarter earnings of 17 cents a share and fourth-quarter earnings of 16 cents a share. Shares in JDS fell to $26-3/4 on Instinet in after hours trade on Tuesday on volume of 230,000 shares. The stock closed at C$43.61 in Toronto, down 14 Canadian cents, and at $28, off 5/16, on Nasdaq. The stock has tumbled more than 80 percent from its 52-week high amid a downturn in spending on fiber-optic equipment. ``These numbers are within the range of current analyst estimates,'' said JDS chief financial officer Anthony Muller in a presentation to merchant banker Thomas Weisel Partners. ``This revised guidance, which is lower than the guidance we previously provided for the periods, reflects of course continued uncertainty in carrier capital spending prospects and customer inventory adjustments, as well as a lower level of near-term sales visibility than we've experienced in recent periods.'' The market had widely anticipated such a move, said Jim Liang, an analyst at WR Hambrecht & Co., but investors may still pull back from JDS's already battered stock due to the size of the cuts. MUTED RESPONSE EXPECTED ``The magnitude of this cut certainly is bigger than the average numbers that the analysts had put out at least on the EPS line,'' said Liang. ``So that is probably a little negative surprise...(but) I would like to think that the response to this one would be relatively muted.'' Liang, who has already cut his estimates on JDS three times since the company reported its second-quarter results, said he is reviewing his forecasts. ``Do we believe that this is the end of downward estimate revisions? We hope so,'' Liang said. The company would not provide guidance for fiscal 2002 due to uncertainty over sales growth. ``We expect to continue to have high rates of profitability although (with) the sales at somewhat lower levels our margins may be affected somewhat,'' Muller said. JDS has traditionally posted gross margins in the range of 50 to 51 percent and operating profits in excess of 30 percent. The company is reducing some spending and its inventory levels, while maintaining its investments in research and development, he added. JDS, which lowered its third-quarter forecast after acquiring SDL Inc. last month, later told Reuters it understood analysts cutting their forecasts even further below guidance amid a spending slowdown underscored by the dramatic warning by Nortel. JDS lowered its third-quarter forecasts in February, cutting its earnings estimate to 17 cents a share from analysts' expectations of 21 cents. The company also forecast 2002 sales of $6 billion. Nortel last month cut its 2001 revenue growth estimate to 15 percent from 30 percent and its earnings growth forecast to 10 percent from 30 percent. It also said it was slashing 10,000 jobs. JDS is cutting 3,000 jobs, or slightly more than 10 percent of its staff. Despite the slowdown, Muller said JDS expects telecom firms will boost their optical communications equipment spending this year to 41 percent of their total budget from 32 percent. ``While we are at a time when business conditions are softer than we would like to see them, we believe the future for optical telecommunications remains very, very bright,'' Muller said. ($1 equals $1.54 Canadian) Email this story - Most-emailed articles - Most-viewed articles -------------------------------------------------------------------------------- More Quotes and News: JDS Uniphase Corp (Toronto:JDU.TO - news; NasdaqNM:JDSU - news) Nortel Networks Corp (NYSE:NT - news; Toronto:NT.TO - news) Related News Categories: telecom, US Market News --------------------------------------------------------------------------------