Why JDS Uniphase Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of telecom networking equipment maker JDS Uniphase soared 18% today after the company's quarterly results easily topped Wall Street expectations.

So what: JDS shares have slumped over the past couple of years on slow telecom spending, but strong second-quarter results -- adjusted EPS of $0.18 on revenue of $429.4 million versus the consensus of $0.14 and $424.2 million, respectively -- reinforces recent optimism over rebounding demand. Adjusted operating margins even expanded from 9.2% in the previous quarter to 11.3%, suggesting that its competitive position is improving as well.


Now what: Management now expects third-quarter revenue of $405 million-$425 million, pretty much in line with Wall Street's view of $413 million. "We are pleased with the progress we've made in aligning our product portfolio with customer spending priorities, resulting in a high percentage of revenue from new products and a positive impact on financial results," said CEO Tom Waechter. "We are well-positioned for growth opportunities in 2013." With the stock now up a whopping 50% over just the past three months, however, I'd wait for some of the exuberance to fade before buying into those opportunities.

Interested in more info on JDS? Add it to your watchlist.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Why JDS Uniphase Shares Jumped originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum