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JDSU Steps Up the Pace

A retooled JDSU (JDSU) says it's geared up for a little growth.

Lest troubling memories linger of the former JDS Uniphase, the San Jose, Calif., company is on Wall Street this week to stress that this is the "new JDSU." And with several underperforming businesses and nearly four dozen executives out the door, the new-and-improved JDSU says it is succeeding by focusing on three main businesses: optical components, network testing and specialty coatings.

David Gudmundson, the company's head of corporate development, dropped by Monday. The visit came ahead of a shareholder vote Thursday on a proposed reverse stock split. JDSU wants investors to rubber-stamp a plan to boost the share price by reducing the number of shares outstanding.

Even without any reverse split, JDSU's revival efforts have been handsomely rewarded. The stock has gained nearly 50% in the two months since the company floated the reverse split plan and changed its name. JDSU shares fell 4 cents to $2.39 in midday trading Monday.

As the key supplier of lasers at the heart of the optical networks, JDSU enjoyed a blistering ride up during the heady Internet building boom. Today, the company appears to have survived the ensuing postboom industry collapse.

CEO Kevin Kennedy is credited with the reorganization of JDSU. Before joining the company in 2003, Kennedy spent time at wireless software shop Openwave (OPWV), and prior to that he ran Cisco's (CSCO) telco business.

Gudmundson, who worked with Kennedy at Cisco, shared an updated to-do list of businesses shoved out or in the process of moving toward the exit. He also showed a new organizational chart featuring only four holdovers from the old JDS Uniphase days. In fact, since Kennedy's arrival, 47 executives have been replaced, says Gudmundson.

And though not as acquisitive as its prebust days, JDSU has made several deals to bolster its offerings. Lacking growth, but with a surplus of cash, JDSU veered off in an entirely new direction in May with the $760 million purchase of Acterna, a network testing and measurement gearmaker.
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