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JDS warns on 1Q sales
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September 24, 2001: 2:23 p.m. ET
Fiber-optic equipment maker says sales lag target but outlook is clearer
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NEW YORK (CNNfn) - Network equipment maker JDS Uniphase Corp. said it expects fiscal first-quarter sales of $325 million, well below Wall Street's forecasts for the period ending Sept. 29, but added that its ability to predict future sales has begun to improve despite the down economy.
Analysts surveyed by earnings tracker First Call expected first-quarter sales of $357.4 million when the company reports results Oct. 25.
JDS (JDS: Research, Estimates) stock jumped more than 16 percent in Monday afternoon trading following the announcement. The tech-heavy Nasdaq, where JDS shares are traded, also was up. At 1:36 p.m. ET, the index was up 73.49 points to 1,496.56
"While forecasting continues to be difficult in the current environment, we believe our ability to predict future sales has begun to improve," CEO Jozef Straus said.
Straus also said he is beginning to see early signs of stabilization even though the economic downturn has not yet reversed.
"I think there's a lot of money on the sideline. People have been waiting for them to acknowledge a bottom," said James JungJohann, an analyst with CIBC World Markets.
JungJohann said the $325 million is low, but is well above the Street's whisper number of $275 million. He said the company has done a good job streamlining its inventory as many of its biggest customers, such as Nortel Networks and Lucent Technologies, face whopping business declines.
However, he believes demand could pick up as soon as March.
Last week, Credit Suisse First Boston raised its rating on JDS shares to "buy" but cut first-quarter sales targets by 18 percent to $310 million. It said it was optimistic about JDS's ability to survive its cash reserves of $1.8 billion.
San Jose, Calif.-based JDS Uniphase, which makes components for the fiber-optic telecommunications industry, said employment now is below 14,000, down from 29,000 in early 2001, and reduction in plant square footage has been proceeding according to plan.
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Last Wednesday, JDS Uniphase said it will take more write-downs of the value of its long-term assets, possibly adding another $5.3 billion to the loss of $50.6 billion it logged in the last fiscal year.
However, JungJohann remains optimistic.
"I just think if you've got the patience to sit on it right here you're going to do okay. Twelve months from now the stock will definitely be higher," JungJohann said. 
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JDS Uniphase
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