Guidance Gooses JDSU

JDSU's (JDSU Quote) foray into the network monitoring business is showing some rich rewards.

Shares jumped 12% in late trading Thursday after the company said it beat fiscal second-quarter sales targets, backed by a strong performance from its tests and measurements division.

The San Jose, Calif., networking equipment maker says revenue for the quarter ended Dec. 31 was about $362.5 million, exceeding the company's earlier guidance, which called for sales of about $342 million. Analysts also were looking for $342 million.

JDSU says higher sales of its network-testing systems helped offset "a small sequential revenue decline in the optical communications segment."

In the past two years, JDSU has made deals to acquire network-monitoring companies in an effort to sidestep the slumping demand for optical networking parts. Just two weeks ago, JDSU bolstered the testing business with a deal to acquire Renton, Wash.-based Casabyte, a developer of wireless network-monitoring systems. In 2005, JDSU entered the field with the acquisition of Acterna, a network testing specialist.

JDSU's strong guidance sent investors galloping into the highly speculative optical networking sector, with rivals Avanex (AVNX Quote), Bookham (BKHM Quote) and Finisar (FNSR Quote) rising 3% or more.

Late Thursday, JDSU soared $2.01 to $17.80, while Avanex added 6 cents to $2.11, Bookham tacked on 8 cents to $3 and Finisar rallied 14 cents to $3.15.