NEW YORK (TheStreet) -- Shares of JDS Uniphase (JDSU) soared 12.76% to $13.65 in after-hours trading Wednesday after the company announced it would split itself into two publicly traded companies, one of which would focus on its optical components business and another which would center on its networking operations.
The company, which develops measurement equipment for telecommunications companies, cable operators, and manufacturers, intends to execute the spin off by the third quarter of next year. This new company would center on optical components and commercial lasers. JDS said in a statement this company would be "positioned for growth opportunities, including the expansion of cloud networks and high-capacity data centers."
The other company would focus on network and service enablement and would work on "the industry's transition to software-defined networks and the need for increased network, service and application visibility." JDSU's current optical security business will work inside this company as a separate business segment.
"We believe two fundamentally focused companies best position us to stay ahead of the accelerating pace of technology change and to compete even more effectively across the unique markets we serve today," said president and CEO Tom Waechter.
Separately, TheStreet Ratings team rates JDS UNIPHASE CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate JDS UNIPHASE CORP (JDSU) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."