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 : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (37595)	7/12/2002 1:02:46 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68168

RESEARCH ALERT-Yorkton sees JDS sales drop in Q1 Friday July 12, 11:44 am Eastern Time Reuters Company News (In U.S. dollars unless noted.) OTTAWA, July 12 (Reuters) - Revenues at JDS Uniphase Corp. (Toronto:JDU.TO - News; NasdaqNM:JDSU - News), the world's largest supplier of optical telecoms components and modules, will be below expectations in the first quarter of its next fiscal year, Yorkton Securities said in a research note on Friday. ADVERTISEMENT Analyst Chris Umiastowski said industry checks suggest JDS is still suffering from customer order delays and pricing pressures, but that the company remains on track to lead an eventual industry recovery. JDS will report its fourth-quarter results on July 25. Umiastowski expects JDS to report fourth-quarter sales of $210 million and a loss of 3 cents a share, excluding restructuring expenses. Company guidance was for revenues of $210 million to $230 million. Analysts polled by Thomson First Call expect, on average, fourth-quarter sales of $212.5 million, and first-quarter sales of $209.1 million. "We believe the worst case scenario for Q1 2003 guidance for JDS could be as low as $180 million. Our estimate for Q1 is $200 million (down $10 million sequentially)," Umiastowski wrote in a note that maintains a "hold" rating on JDS and a $3.50 stock target. "We believe investors should stay on the sidelines until JDS reports on July 25." JDS, whose equipment is used to boost the speed and capacity of fiber optic networks, has been hard hit by a meltdown in the telecommunications sector. Key customers, such as Nortel Networks (NYSE:NT - News) and Lucent Technologies (NYSE:LU - News), have seen demand for their products dwindle amid deep spending cuts by telecoms carriers. "In the worst case, telecom-related sales could fall another 20 percent," the analyst wrote, adding that JDS now generates a significant portion of sales from non-telecoms products. [Harry: It is? Who are they selling to then. There isn't significant optical demand anywher else.] Orders for JDS gear are still being canceled, Umiastowski said, though it appears likely the company will report a smaller cancellation penalty than the third quarter's $21 million. "We believe customers are still canceling orders," he said. "These order cancellations and attempted cancellations are further evidence to suggest that Q1 2003 revenues could be below those reported for Q4 2002." Pricing pressure for optical components, meanwhile, has not eased, although it does not appear to have worsened, the analyst said. "On the longer-term positive side, JDS is taking strides to counteract these difficult market conditions," Umiastowski wrote. The company has made strong improvements to its relationship with Cisco Systems (NasdaqNM:CSCO - News), which suffered last year due to disagreements on how to deal with order cancellations, he said. JDS has also made progress in moving manufacturing production from Ottawa to a lower-cost facility in Shenzhen, China, he added. The transition will eventually leave about 300 production jobs in Ottawa, he suggested. "While we may not see a great deal of positive news in the short term, we believe JDS is extremely well positioned to lead the industry recovery," Umiastowski wrote. "Our discussions with members of the industry suggest that customers have stepped-up their requests for more complex modules, including software, firmware and control electronics." JDS shares edged up on Friday morning, the fourth straight session of Nasdaq gains. The stock added 4 cents to $3.88 on Nasdaq and 41 Canadian cents to C$6.80 on the Toronto Stock Exchange.