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20 August 2009


JDSU sees component inventory levels burning off

Optical component maker JDSU of Milpitas, CA, USA registered a slight sequential decline in sales in its fiscal fourth-quarter 2009 (ended 27 June), as customers in the fiber-optic networking sector continued to use up excess inventories.

The firm saw total sales dip 1.3% sequentially to $277m. Compared with the same period in 2008, that figure represented a 29% decline, however, highlighting the effect of the global recession on sales.

Following a number of acquisitions over the past couple of years, JDSU’s revenues are now dominated by its Communications Test & Measurement division. In the latest quarter, these were worth $135.5m, just under half of the overall total.

Revenue from its Communications and Commercial Optical Products division, which includes the advanced semiconductor components used in optical networks, dropped to $90.7m – down 46% on $167 m a year ago.

That huge drop reflects the still-tough economic environment, although president & CEO Tom Waechter believes that the firm is now set to emerge from the recession in good shape: “We begin fiscal 2010 with a stronger balance sheet, an improved business model and a stronger product portfolio, well-positioned for growth when the economy rebounds.”

With many customers still burning through product inventory, that rebound is yet to gather much momentum, but JDSU has high hopes for its new tunable XFP transceiver. A beta version of the tunable source, which promises to greatly simplify optical networks, has already been shipped to 12 customers, the firm says.

JDSU officially launched the tunable transceiver back in March, and won an out-of-court settlement with rival Oclaro shortly afterward, following a patent dispute over the two companies’ InP-based chip designs.

In the latest quarter, JDSU posted an operating loss of $61m. The company has also issued its full-year results for fiscal 2009, in which it made a net loss of $866m on sales of just under $1.3bn.

However, those loss figures include a huge write-down of $760m and a restructuring charge of $38.7m, as Waechter and colleagues took major cost-saving measures including the consolidation of its GaAs device production facilities.

For the forthcoming fiscal first-quarter 2010 (ending 3 October 2009), JDSU’s management team remains cautious about any major economic recovery, and expects a small sequential increase in revenues, to somewhere between $283m and $300m.

See related items:

JDSU consolidating VCSEL fab into San Jose to cut costs

JDSU sales decline accelerating

CEO and 400 jobs to go as JDSU closes seven R&D centers & three plants

Search: JDSU Optical communications


The author Michael Hatcher is a freelance journalist based in Bristol, UK.