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JDS Uniphase warns
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June 14, 2001: 5:12 p.m. ET
Fiber optic component maker sees sales, profits sliding
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NEW YORK (CNNfn) - JDS Uniphase, the top supplier of components used to build fiber-optic networking equipment, on Thursday lowered its financial targets for the current and upcoming quarters, citing continued weakness in telecommunications service provider spending.
The company said it expects sales for its fiscal fourth-quarter ending June 30 will be roughly $600 million, compared with an earlier expectation for sales nearer $700 million.
Because of the lower revenue, JDS Uniphase said it will record fourth-quarter inventory write downs ranging between $225 million and $250 million. As a result of this, the company said it now expects to post a fourth-quarter loss ranging between 6 cents and 8 cents per share, excluding one-time charges.
Analysts most recently expected the company to log a profit of 5 cents per share, according to a survey conducted by earnings tracker First Call.
Additionally, JDS Uniphase said it anticipates sales in the fiscal first quarter ending Sept. 29 to fall to $450 million. Analysts recently had expected revenue nearer $663 million. The company did not provide a first-quarter earnings estimate. The Street most recently had expected 5 cents per share, according to the First Call survey.
Shares of JDS Uniphase (JDSU: Research, Estimates) fell 37 cents to $13.81 on Nasdaq ahead of the earnings warning, which was released after the closing bell. They plunged another $1.31 to $12.50 in extended hours trade. Over the past year, the company's shares have fallen more than 91 percent from a high of $140.50.
"The business downturn has been rapid, steep and unprecedented, and the continuing lack of visibility from our customers suggests to us that a cautious outlook continues to be warranted for the short term," Jozef Straus, the company's co-chairman, president and chief executive, said in a statement Thursday.
"At present, order levels clearly reflect lower carrier capital spending and the resulting desire of our customers to reduce inventories sharply," Straus added.
As have other companies that supply equipment and components used in data-networking and telecommunications equipment, JDS Uniphase has been stung by the slowing and uncertain U.S. economy which has prompted many of its customers to either defer or cancel new-equipment orders.
The company's most recent revised forecasts represent the second time executives have lowered the bar for the fourth quarter. Before they reported third-quarter results in April, the Street had been expecting an operating profit of 12 cents per share on sales in excess of $925 million.
JDS also said in April that it will aggressively cut costs by cutting 5,000 jobs, or 20 percent of its work force, and closing 25 facilities. It also announced plans to move several of its manufacturing facilities to China as part of a "global realignment program."
The company said it expects to record charges related to those cost-cutting measures ranging between $375 million and $425 million in the fourth quarter.
JDS Uniphase executives are expected to provide additional details about the restructuring measures and their longer-term outlook when the company reports its fourth-quarter results on July 26. 
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