JDS Uniphase shares climb after quarterly results

THE SPARK: Late Tuesday, JDSU said its fiscal first-quarter net income, excluding one-time items, totaled 18 cents per share ? 5 cents higher than what analysts polled by FactSet expected.

JDSU technology is used by communications companies to test the quality of their networks. JDSU also makes optical transponders and other optical equipment used for sending information over fiber optic cables.

Revenue for JDSU rose to $421 million from $405 million a year earlier. Analysts expected $415 million.

THE ANALYSIS: In a note to investors, Kaufman Bros. analyst Greg Mesniaeff said the company’s results were better than he expected but called its outlook “unsettling.”

The company, based in Milpitas, Calif., predicted adjusted revenue of $375 million to $405 million for the current quarter. It expects a drop of $35 million to $45 million because of recent flooding in Thailand that has hampered its production there.

Mesniaeff had been looking for $458 million in adjusted second-quarter revenue; he now expects about $392 million.

“Thailand, in our opinion, is not the major issue for JDSU,” he said, noting that he’s more concerned about the timing of spending by communications carriers and cable companies on upgrading to next-generation high-speed wireless networks.

“With time lines for both now, in many cases, being shifted into (the second half of 2012), we remain concerned about JDSU’s prospects over the next three quarters,” he said.

Mesniaeff kept his “Hold” rating and $14.50 price target on the shares.

In a separate client note, Pacific Crest analyst Nathan Johnsen kept his “Outperform” rating on the stock but cut his price target by $2, to $16. He said that although “finding a meaningful catalyst may be a challenge over the near term” he sees JDSU as a “solid potential long-term holding for investors.”

SHARE ACTION: JDSU shares rose 83 cents, or 7.2 percent, to $12.31 in afternoon trading.