Why JDS Uniphase (JDSU) Is Up Today

NEW YORK (TheStreet) -- JDS Uniphase  (JDSU) was rising 6.76% to $13.58 shortly after the market opened on Friday after the fiber-optics components vendor reported second-quarter results that beat analysts' expectations.

Revenue rose 4% year-over-year to $447.6 million, allowing JDS Uniphase to earn 19 cents per share. Analysts had expected earnings of 14 cents on $433.7 million in sales. Gross profit margin also ticked upward to 48.5% from 48% in the same period one year earlier, while operating margin inched downward to 11% from 11.4%.

The company also projected third-quarter revenue in the range of $420 million to $440 million, which surpassed analysts' expectations of $426 million.

"Our fiscal second quarter results exceeded our guidance expectation with gross margin improvements across all three segments," said President and CEO Tom Waechter in the company's statement. "We are pleased with the performance of our organic business, the progress of our continuing investments in new offerings which align with customer requirements and market trends, and our continuing M&A strategy to expand our product portfolio into mobility and service enablement. We believe JDSU is well-positioned to leverage our technical leadership in new markets in network infrastructure, commercial lasers and anti-counterfeiting in calendar 2014."

TheStreet Ratings team rates JDS UNIPHASE CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate JDS UNIPHASE CORP (JDSU) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JDS UNIPHASE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, JDS UNIPHASE CORP turned its bottom line around by earning $0.24 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.59 versus $0.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 102.6% when compared to the same quarter one year prior, rising from -$11.60 million to $0.30 million.
  • JDSU's revenue growth trails the industry average of 23.6%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 49.86% is the gross profit margin for JDS UNIPHASE CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, JDSU's net profit margin of 0.06% significantly trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.92 is very high and demonstrates very strong liquidity.
  • You can view the full analysis from the report here: JDSU Ratings Report

More from Markets

Replay: Jim Cramer on Tariffs, the Market Rally, Caterpillar and Micron

Replay: Jim Cramer on Tariffs, the Market Rally, Caterpillar and Micron

Video: When Planning for Retirement, Don't Underestimate Your Life Span

Video: When Planning for Retirement, Don't Underestimate Your Life Span

Video: Here's What May Come Next for Theranos Founder and CEO Elizabeth Holmes

Video: Here's What May Come Next for Theranos Founder and CEO Elizabeth Holmes

Charlie Gasparino Says GE Is Reportedly Looking to Slash Its Dividend Again

Charlie Gasparino Says GE Is Reportedly Looking to Slash Its Dividend Again

GE Confirms $11.1 Billion Transportation Merger With Wabtec

GE Confirms $11.1 Billion Transportation Merger With Wabtec