Updated from 4:44 p.m. EDT
Keeping with April's telecom-meltdown theme,
offered abundant bad news Thursday and retreated from any claims that the bottom in telecom-equipment spending is at hand.
The maker of fiber-optic components for telecom networks posted weaker-than-expected third-quarter results, reduced fourth-quarter guidance and cut more jobs. Its shares, having lost more than 90% of their value since they soared into the stratosphere during the Internet building boom of the late 1990s, dropped a few pennies as tuned-out investors turned their attention elsewhere.
Given the well-chronicled struggles and
fresh new round of spending cuts at its phone company customers, JDS Uniphase's inability to reverse its yearlong sales slump comes as little surprise. Looking ahead, JDS executives said on a postclose earnings call with analysts that they couldn't provide any projections beyond the current quarter. And breaking with a recent tradition, they offered no assurances that sales, which have dropped by two-thirds from a year ago, would stabilize any time soon.
The Ottawa and San Jose, Calif.-based company posted a third-quarter loss of $4.3 billion, or $3.19 a share. That actually represented a solid improvement over last year's loss of $41.8 billion, or $36.63 a share. The year-ago figure included a massive writedown of goodwill incurred in the company's boom-era buying spree.
On a pro forma basis excluding certain costs, JDS Uniphase lost 5 cents a share on sales of $262 million. Analysts surveyed by Thomson Financial/First Call had expected JDS to report a third-quarter loss of 2 cents a share, reversing the year-ago 14-cent profit. Showing how sharply the market for fiber optics has reversed since last spring, revenue was expected to fall to $254 million from $920 million a year earlier.
The bubble-inflected buying spree, during which JDS became one of a giddy stock market's
very favorite tech highfliers saw the company build its workforce up to 29,000 workers. Last June, as the company's quarterly sales peaked and it became evident that industrywide spending wouldn't be sustainable at its 2000 levels, JDS joined with other red ink-stained networkers and started trimming jobs in an effort to bring costs down.
Now, as sales slip at even the big, stable telcos, and suppliers like
slash their workforces and shed businesses to stay afloat, JDS is wielding the ax with perhaps the most authority of all. The company said Thursday it would cut an additional 2,000 jobs, bringing its postcut head count to 8,000 -- barely a quarter of the year-ago high. CEO Jozef Straus said in the earnings call that the company targeted a $300 million quarterly revenue break-even point with the latest round of cuts, though with fourth-quarter estimates now standing in the low $200 million range, it's far from clear that will be enough.
The optical-component maker says it now expects to post a fourth-quarter pro forma loss of between 3 and 4 cents a share. Revenue will drop to between $210 million and $230 million, the company said. Analysts had expected a loss of a penny a share on revenue of $243 million, reversing the year-ago 2-cent pro forma profit on revenue of $600 million.
JDS declined to offer guidance beyond the coming quarter. The company has often said in recent periods that it can't predict more than a quarter out because of the oft-invoked limited visibility, but Thursday's comments marked a departure from Straus' tried-and-true practice of pronouncing the here-and-now as the bottom in tech spending. This time around, though, Straus said the company can't predict that the June quarter will be the bottom.
After the report came out, JDS shares slipped 16 cents in postclose trading to $4.87, putting them more than 80% below their 52-week high.