Optical networking and associated semiconductor technology company JDSU of Milpitas, CA, USA has reported its first-quarter 2013 (ended 29 September 2012). Non-GAAP net revenue was $420.9m and net income was $35.0m ($0.15 per share). Previous quarter revenue was $434m, with net income of $35.4m (also $0.15 per share). Revenue for Q1/2012 was $416.1m, with net income of $41.2m ($0.18 per share).
The latest results are "solid" and reflective of the company's ability to deliver to its commitments "even during periods of economic uncertainty", according to president & CEO Tom Waechter.
"Communications service providers continue to spend cautiously due to macro-economic and geo-political concerns. Because of this uncertain climate, we are not projecting the calendar year-end budget release that frequently occurs in the Telecom industry," he adds. "Looking forward, we are encouraged by the relentless broadband demand that remains a powerful driver for JDSU's core business.
"Our ability to differentiate through product innovation, evolve our variable cost model, and maintain a robust balance sheet means that we are well positioned to capitalize on future growth opportunities as the gap closes between demand and actual spending by our core network customers."
During the quarter, JDSU generated $43.1m of cash from operations (up from $38m last quarter). Total cash and investments held stands at $730.3m.
Looking to fiscal second-quarter 2013 (ending 29 December 2012), the company expects non-GAAP net revenue to be between $410m and $430m.
Furthermore the company also adjusted its Consolidated Statements of Operations and segment financials to reflect the October 2012 sale of its holographic security business.
Market analysis
"Like our peers, JDSU is seeing conservative global carrier capital spending due to ongoing macroeconomic weakness in Europe, slower growth in China and uncertainty in the United States," commented Waechter further in the analysts' conference. "However, the relentless increase in broadband demand remains a powerful driver for our business," he adds.
"In industry recovery cycles, customer investment technically shows up here first, and we are encouraged by trends we see in this business, which delivered strong year-over-year and sequential revenue growth. We have market-leading positions in the fastest-growing optical communications segments, including ROADMs [reconfigurable optical add-drop multiplexers] and tunable XFP.
"We are also making good progress with pluggable transceivers to support growing LAN/SAN needs and the cloud for customers building proprietary data-center networks. We expect to see robust revenue growth in this market over the next few quarters," continued Waechter.
"With respect to market adjacencies, we reported our highest revenue in five years in our commercial lasers business. Revenue from high-powered laser - fiber lasers - grew as expected from $2.5m in fiscal Q4 2012 to $6.7m in fiscal Q1.
"We are also pleased to announce our third gesture recognition customer who plan to use our laser diodes and optical filters in a new personal computing application," Waechter adds.
"We also made the decision in Q1/2013 to discontinue our investment in concentrated photovoltaic (CPV) technologies as market opportunities for solar are currently limited. We'll continue to monitor this market should conditions change," Waechter concluded.
"We expect second-quarter [2013] revenue to be between $410m and $430m and our non-GAAP operating margin to be between 7.5% and 9.5%," noted Rex S. Jackson, JDSU's acting chief financial officer & senior VP Business Services. "We are closely monitoring the impact of the severe storms in the East Coast of the USA at the end of October 2012 on our operations and those of our customers in the region," he added. "We have not reflected any potential negative impacts in the guidance we provide today."
Waechter then wrapped up by saying, "We continue to progress our business model and have initiatives we are working on in order to reach our target operating models in both our Communications and Commercial Optical Products [CCOP] and Communications Test & Measurement businesses. We expect to see significant benefits from these initiatives over the next several quarters," he added.
"We will continue our record of strong operational execution. We will focus on things in our control, such as a market-leading product portfolio aligned with high-growth opportunities, a variable cost structure with increasing scale and leverage and a robust balance sheet."
