Investopedia: JDS Uniphase Comes Through Loud And Clear

Tech investors have not been too forgiving to companies through this earnings cycle, but JDS Uniphase (Nasdaq:JDSU) largely took matters into its own hands with a stellar result. While there is still plenty of room to debate JDSU's long-term future, the near-term outlook for optoelectronics seems to be pretty strong. 

A Blowout in the Fiscal Second Quarter
JDS Uniphase delivered everything investors wanted in its fiscal second quarter and then some. Revenue jumped 16% from the first quarter (and 39% from the year-ago level) and handily smote even the high estimate on the Street. Revenue growth was definitely fueled by test and measurement business (up 27% sequentially), but the optical products business was no slouch at 14% sequential growth. While the Advanced Optical Technologies unit saw a 10% sequential revenue decline, analysts did not expect a lot from this business.

As revenue jumped ahead of plan, the company was able to leverage better profitability. Gross margin increased 140 basis points on a sequential basis, while the operating margin expanded 450 basis points to over 15%. (For more, see The Bottom Line On Margins.)

The Road Ahead
If management is right, this was not a one-quarter recovery in JDS Uniphase's business. The company guided for a level of March quarter revenue that looks to be about 7% higher than where estimates had been, and while there could be some sequential pullback in profitability, it would seem that numbers should be going up overall.


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