Major Relief Rally in JDSU (JDSU)

If you have been following tech stocks for a decade or more, JDS Uniphase (NASDAQ: JDSU)  is one you will know quite well.  For almost the entire 2000’s, you probably wish you didn’t know it if you had not been short the stock.  We even noted this one recently as a turnaround that just hadn’t ever been turned.

Maybe that is changing.  Shares are surging in after-hours trading after the company blew the handle off of some estimates with its earnings report, despite earnings lower year over year.  Net revenues came in at $399.2 million and net income was $0.09 EPS or $21.2 million.  BUT… before items and charges, JDSU would have posted EPS at $0.22.   First Call had estimates pegged at $0.12 EPS on revenues of $386.39 million.

The optical components and fiber optic makers gave strong enough guidance as well.  JDSU said it now expects next quarter’s non-GAAP revenue to be $380 to $402 million and non-GAAP operating margin to be in the range of 4-7%.  First Call has estimates at $390+ million revenues.

Before calling this a success in a turnaround, we would probably rather see another couple quarters of strong orders.  We’d also caution that this successful post-earnings trading is on the heels of a significant stock drop.  This one got low enough that we even got to review it for our "10 Stocks Under $10" subscriber letter. 

Shares closed down almost 3% at $10.16 in normal trading but shares are up about 18% to $12.05 in an after-hours relief rally.  JDSU’s 52-week trading range is $9.49 to $17.15 and shares were nearly $15 just 90-days ago.

Jon C. Ogg
February 5, 2008