JDS Uniphase Q2 Results Miss Estimates, Guides Q3 Revenue Below Street View

(RTTNews) - Communication equipment maker JDS Uniphase Corp. (JDSU, JDU.TO) reported Thursday a net loss for the second quarter compared to a profit last year, reflecting higher charges, lower operating margins and a revenue decline.

Both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also provided revenue forecast for the third quarter, below Street view.

"We continue to experience the benefits of diversification and product differentiation, which drove strength in both gross margin and operating margin at the higher end of the guidance range even as U.S. carrier spend impacted revenue in the second quarter," President and CEO Tom Waechter said in a statement.

The Milpitas, California-based company reported a net loss of $25.1 million or $0.11 per share for the second quarter, compared to net income of $8.8 million or $0.04 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $35.4 million or $0.15 per share, compared to $45.3 million or $0.19 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts estimate typically excludes one-time items.

Net revenue for the quarter declined 2.3 percent to $437.1 million from $447.6 million in the same quarter last year, but missed fourteen Wall Street analysts' consensus estimate of $444.49 million.

Operating margin for the quarter contracted 630 basis points from the year-ago quarter, despite gross margin improvement of 10 basis points from last year.

Network enablement revenue declined 14.2 percent to $133.7 million, while revenue from service enablement grew 16.6 percent to $45.7 million from last year.

Communications and commercial optical products revenues increased 4.6 percent to $207.1 million, while optical security and performance products revenue decreased 7.3 percent to $50.6 million from a year ago.

Looking ahead to the third quarter, the company expects adjusted earnings to be $0.09 +/-0.02 per share, on projected adjusted revenues of $418 million +/-10 million. Street is currently looking for earnings of $0.14 per share on quarterly revenues of $431.25 million.

The company also noted that it expects the completion of separation into two publicly traded companies by the calendar third quarter of 2015. The company's board had approved in September 2014 a plan to split itself into two publicly traded companies, with one business focusing on optical products and the other on networking.

"We are pleased with our progress toward the planned separation of SpinCo (CCOP) and NewCo (NE/SE/OSP) and currently expect to complete the transaction by the calendar third quarter of this year," Waechter added.

JDSU closed Thursday's regular trading session at $13.26, down $0.34 or 2.47% on a volume of 4.10 million shares. The stock lost a further $0.64 or 4.79% in after-hours trading.