Yesterday, after the closing bell, JDS Uniphase Corp. (JDSU) declared mixed financial results for the first quarter of fiscal 2014. While net income met the Zacks Consensus Estimate, total revenue surpassed the same. However, management provided a disappointing revenue outlook for the ensuing second quarter of fiscal 2014. As a result, in the aftermarket trade on Nasdaq, the stock price of JDS Uniphase was down by $1.17 (7.93%) to $13.58.
Quarterly net revenues were $429 million, up 1.9% year over year and also above the Zacks Consensus Estimate of $424 million. On a GAAP basis, quarterly net income from continuing operations was $0.3 million or a breakeven per share compared with a net loss of $9.8 million or 4 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share of 7 cents were exactly in line with the Zacks Consensus Estimate.
Adjusted gross margin, in the reported quarter, was 46.3% compared with 45.8% in the year-ago quarter. Operating expenses were $178.6 million, up 3.5% year over year. Adjusted operating margin was 8.3% compared with 9.2% in the year-ago quarter. Quarterly adjusted EBITDA was $53.2 million as against $55.6 million in the year-ago quarter. Overall book-to-bill ratio was below 1.0.
JDS Uniphase generated $29.5 million of cash from operations in the reported quarter. At the end of the first quarter of fiscal 2014, JDS Uniphase had $1,057.1 million of cash & marketable securities and $518.2 million of outstanding debt on its balance sheet compared with $486.2 million of cash & marketable securities and no outstanding debt at the end of fiscal 2013. The debt-to-capitalization ratio was 0.30 at the end of the reported quarter.
Revenue Segments
In the first quarter of fiscal 2014, the Network and Service Enablement segment accounted for $171.9 million of revenues, up 1.4% year over year. The Communications and Commercial Optical Products segment generated $204.6 million, up 5% year over year. Within this segment, Optical Communications revenues were $176.2 million, up 8.1% year over year and Commercial Lasers business revenues were $28.4 million, down 11% year over year. The Optical Security and Performance segment generated the remaining $52.5 million revenues, down 7.1% year over year.
Geographic Segments
In the first quarter of fiscal 2014, the Americas segment accounted for 46.4% of the total revenue, the EMEA segment generated 24.3% and the remaining 29.3% came from the Asia-Pacific region.
Future Financial Outlook
For the second quarter of fiscal 2014, management expects the company’s revenues to be within the range of $420–$440 million. Its mid-point of $430 million is significantly below the current Zacks Consensus Estimate of $459 million.
Other Stocks to Consider
JDS Uniphase currently has a Zacks Rank #3 (Hold). Other stocks in the Communications Component manufacturing industry that are performing well include EXFO Inc. (EXFO), ClearOne Inc. (CLRO) and Envivio Inc. (ENVI). While EXFO currently carries a Zacks Rank #1 (Strong Buy), both ClearOne and Envivio have a Zacks Rank #2 (Buy).
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