Solid growth for JDSU's communications group
While JDS Uniphase may have worried investors with its overall financial performance, its communications business is seeing solid growth as the fiber-optic market settles down.
For its second quarter of fiscal 2005 ending 31 December 2004, JDSU reported revenue of $180.5 million. The communications group contributed $106.7 million, or 59% of this total. The other $73.8 million came from the company's commercial and consumer products group.
For much of the past two years, the two product groups have reported roughly equal revenues.
The communications group has now seen a sequential increase in revenue for five consecutive quarters. In the first six months of the current fiscal year, the group has posted $212.8 million in revenue, compared with $152.1 million one year ago "“ a 37% increase.
JDSU is now much more focused on the faster-growing metropolitan market sector rather than long-haul applications, and on modules rather than components.
But despite the improving picture, this part of the JDSU business still ran up an operating loss of $14.5 million in the recent quarter, and the company still faces a considerable challenge to become profitable.
CEO Kevin Kennedy said in a conference call to discuss the latest results that although the optical communications business was "healing", it remained difficult to predict.
The company is still undergoing substantial restructuring, and Kennedy added that JDSU would continue to consolidate its US manufacturing locations and transfer them to lower-cost parts of the world.
In response to questions about when JDSU would likely return to profitability, he said that the company was "in the second or third inning of a nine-inning game", suggesting that it would remain in the red for the foreseeable future.
