JDS Uniphase shares rise after 2Q report shows signs of improving demand

JDS Uniphase shares up rise on improving demand

PHILADELPHIA — Shares of JDS Uniphase Corp. rose Wednesday after the company’s second-quarter financial results pointed to improving demand across its businesses.

RBC Capital Markets analyst Mark Sue said the company, which makes optical communications equipment and testing gear for communications firms, is gaining market share.

He raised his calendar year 2010 revenue outlook to $1.39 billion from $1.36 billion and his earnings per share estimate to 44 cents from 38 cents.

Late Tuesday, JDS said it lost $19.5 million, or 9 cents per share, compared to a loss of $722.9 million, or $3.36 per share, mainly due to a nearly $700 million charge. Excluding one-time items, the company earned 12 cents per share in the latest period.

Revenue fell 3 percent to $342.9 million. Both earnings and revenue topped the forecast of analysts polled by Thomson Reuters.

“Had JDSU not experienced component shortages, revenues would have been closer to $355 million,” Sue said in a research note.

JDS expects to post revenue of $325 million to $350 million in the third quarter. Analysts were expecting $323 million.

Raymond James analyst Todd Koffman said he was encouraged by the second quarter results, in which JDS recorded improving margins, stronger revenue trends and better demand.

In particular, he noted that JDS’ optical communications business became profitable again after four quarterly losses. This unit’s business represents 28 percent of total revenue.

Koffman said he expects phone company customers to step up spending and boost JDS’ quarterly earnings results into fiscal 2011. He raised his price target by $1.50 to $10.

Shares of JDS, based in Milpitas, Calif., were up 23 cents, or 2.8 percent, to $8.60 in afternoon trading. The shares traded as high as $8.79, earlier in the session.