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JDSU Resurfaces

The company's first-quarter numbers will be closely watched after the bell.



watchers will be looking for signs that the turnaround is moving in the right direction.

The optical parts maker will deliver fiscal first-quarter results after regular trading closes Wednesday. But beyond the numbers, investors will be interested to hear if gear demand has stabilized and why exactly the company's sales chief, Mark Sobey, abruptly quit last month.

JDSU has slashed costs, cut staff, killed money-losing units, and acquired new businesses like network test and measurement systems in an effort to pull the company out of a collapsed optical market. The re-engineering work has helped put the stock on the radar for the speculative crowd looking for rebirth possibilities.

The curiosity about JDSU as a potential back-from-the-dead opportunity may have gained momentum this spring when mainstream Wall Street research shop Citigroup upgraded the stock to a hold.

The stock is up 71% since May, when it hit its low for the year. JDSU was up 3 cents to $2.27 in midday trading Wednesday.

"There is a bullish case being made about JDSU, but I haven't been interested," says one money manager with no position. "I got turned off a long time ago after waiting and waiting for the company to turn down the costs."

The company says the wait is over and expects cost savings from the cuts to shave $4 million of the fiscal first-quarter performance. And those savings will total $9 million by the end of the current quarter and eventually hit $22 million by the fiscal year-end in June.

In a federal filing that announced the sudden departure of sales chief Sobey last month, the company stuck with its guidance that called for sales to be slightly better than $250 million in the quarter.

Analysts, by the way, are looking for a penny-a-share loss on $250 million in sales for the fiscal first quarter, according to Reuters Research.

"I haven't been paying attention to them, but maybe I should," says the money manager.

If JDSU doesn't disappoint this time around, it's likely more investors will start taking a look.