Analyst reports: JDS boosts forecasts, pleases Wall Street

A dozen analysts praise JDS Uniphase in research notes, a day after the fiber-optic components maker boosts its sales and profit forecasts.

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A dozen analysts praised JDS Uniphase in research notes Friday morning, a day after the biggest maker of fiber-optic components boosted its sales and profit forecasts.

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JDS hangs tight in rocky market
Jim Laing, analyst, WR Hambrecht

JDS executives announced Thursday that they expect fiscal year 2001 sales to rise 115 percent to 120 percent, up from an earlier forecast of 90 percent. The company's fiscal year will end in June.

JDS also expects to earn 80 cents per share in fiscal 2001, excluding costs for acquisitions, chief financial officer Tony Muller said Thursday during a conference call. Analysts has been expecting 70 cents, according to a poll by First Call/Thomson Financial. The company's fiscal second quarter ends in December.

Muller also said JDS is expected to earn a fiscal second-quarter profit of 19 cents to 20 cents a share, excluding acquisitions. Analysts were bracing for a profit of 17 cents a share.

Despite production boosts from new plants and acquisitions, executives said JDS still doesn't have enough capacity to meet demand for its products. The company is discussing a manufacturing expansion and is also considering more acquisitions.

The company's bullish outlook eased worries among analysts and investors that demand for lasers and other parts was drying up. Earlier this week, Lucent Technologies and Nortel Networks announced that orders of fiber-optic equipment had slowed, causing those companies' stocks to tank.

JDS traded on Friday morning at $81.13, down 1.44 percent from Thursday's closing price. But that represents a 170.54 percent gain from the company's 52-week low of $28 per share.

In wake of the company's new forecasts, a raft of financial institutions boosted their outlooks or reiterated bullish stances on JDS.

Sprott Securities raised JDS to "strong buy." BMO Nesbitt Burns raised it to "outperform."

Thomas Weisel, US Bancorp Piper Jaffray, and CE Unterberg Towbin reiterated "strong buy" positions.

WR Hambrecht, ABN AMRO, PaineWebber, Credit Suisse First Boston, and National Bank reiterated "buy" ratings. Merrill Lynch reiterated its "near-term accumulate" rating.

Analyst Dayle Hogg at GMP reiterated a "buy" rating but increased the 12-month target price to $202 from $182 per share.

JDS also announced Thursday that fiscal first-quarter sales rose to $786.5 million from $290 million a year ago, beating the average estimate of $755.9 million, according to a poll by First Call. The company's loss widened to $1.02 billion, or $1.07 a share, from $113.9 million, or 17 cents, due to acquisition costs.