Analysts Answer JDS Uniphase Forecast by Lowering Targets

Lehman Brothers, Goldman Sachs and UBS Warburg apparently believe the projections coming out of JDS Uniphase (JDSU Quote - Cramer on JDSU - Stock Picks), as the firms lowered their targets a day after the optical components maker indicated that such a move would be the wise thing to do.

Nevertheless, shares of JDS defied the forecast and the analysts, recently gaining $1.63, or 4.2%, to $40.25 in trading on the Nasdaq. But that move could be attributed to the fact that Standard & Poor's will increase JDS Uniphase's weighting in the S&P 500 after the close tonight, to account for the just-completed acquisition of SDL.

Lehman analyst Arnab Chanda cut his 2001 earnings estimate to 74 cents a share from 81 cents and the 2002 estimate to 86 cents from $1.03 "based on sharply lower visibility."

"We continue to emphasize caution given our thesis that lower visibility will be followed by pricing weakness," Chanda wrote in a report.

Goldman analyst Natarajan Subrahmanyan also lowered his 2001 earnings estimate for JDS to 74 cents a share from 82 cents, and cut his 2002 estimate to 88 cents from $1.20.

UBS cut its price target on the company to $60 from $75, thought the firm kept its buy rating on JDS.

JDS, which yesterday completed its merger with SDL, forecast third-quarter earnings of 17 cents a share, 4 cents below the First Call/Thomson Financial consensus estimate. The company also forecast earnings of 74 cents a share for the fiscal year ending in June, about 8 cents shy of the consensus estimate.