OPXT Opnext, Inc. (MM)

Yesterday, after market close, JDS Uniphase Corp. (JDSU) declared disappointing financial results for the third quarter of fiscal 2012. Both the company’s top- and bottom-line fell below the Zacks Consensus Estimates. Consequently, in the after market trade on NASDAQ, stock price of JDS Uniphase was down by 54 cents (4.49%) to $11.50.

Optical Networking component sector is highly competitive. The company competes fiercely with several players, such as Finisar Corp. (FNSR), Oplink Communications Inc. (OPLK), Opnext Inc. (OPXT), and Oclaro Inc. (OCLR), to name a few. JDS Uniphase cited delay in carrier order and volatile global macro-economy as the primary reasons for this weak performance.

Quarterly net revenue was $409.2 million, down 10.1% year over year, and well below the Zacks Consensus Estimate of $420 million. On a GAAP basis, quarterly net loss was $17.4 million or a loss of 8 cents per share compared with a net income of $38.6 million or 16 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special items) EPS was 5 cents, missing the Zacks Consensus Estimate of 7 cents.

Gross margin in the reported quarter was 45.5% compared with 47.6% in the year-ago quarter. In the third quarter, operating expenses were $177.3 million, down 5.2% from the prior-year quarter. However, quarterly operating loss was $7.6 million compared with an operating income of $12.6 million in the prior-year quarter.  Total segment operating income in the previous quarter was $29.9 million compared with $55 million in the prior-year quarter.

At the end of the third quarter of fiscal 2012, JDS Uniphase had $718.5 million of cash & marketable securities and $300.8 million of outstanding debt on its balance sheet compared with $695.7 million of cash & marketable securities and $285.8 million of outstanding debt on its balance sheet at the end of fiscal 2011. At the end of the reported quarter, debt-to-capitalization ratio was 0.22 compared with 0.21 at the end of fiscal 2011. JDS Uniphase generated $13.2 million of cash from operations in the third quarter of fiscal 2012.

Revenue Segments

In the third quarter of fiscal 2012, Communications Test and Measurement segment accounted for $177.8 million of revenue, down 6% year over year. Communications and Commercial Optical Products segment generated $173.1 million, down 17.3% year over year. Within this segment, Optical Communications revenue was $143.2 million, down 22.5% from the prior-year quarter and Commercial Lasers business revenue was $29.9 million, up 21.1% from the prior-year quarter. Advanced Optical Technologies segment generated the remaining $58.3 million revenue, up 2.6% year over year.

Geographic Segments

In the third quarter of fiscal 2012, the Americas segment accounted for 47% of total revenue, the EMEA segment generated 25%, and the rest 28% came from the Asia-Pacific region.

Future Financial Outlook

For the fourth quarter of fiscal 2012, management expects the company’s non-GAAP revenue to be within the range of $415 million - $435 million.

 
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