JDS Shares Soar 19% on Sales Forecast

JDS Uniphase Corp. shares leaped 19% on Monday after the maker of fiber optic equipment said it sees positive signs that its industry is stabilizing and predicted quarterly sales figures at a time when industry forecasts are rare.

JDS said it expects sales for its fiscal first quarter ending Sunday will be about $325 million, in keeping with previous statements that revenue in the quarter would be below earlier guidance of $450 million.

“While forecasting continues to be difficult in the current environment, we believe our ability to predict future sales has begun to improve,” said Jozef Straus, co-chairman and chief executive.

Investors, still reeling from attacks on the World Trade Center and the Pentagon and fearful of a recession, greeted the news with enthusiasm, bidding JDS’ stock up $1.03 to $6.39 Monday on Nasdaq, amid strength in tech stocks.

“I don’t think the sales number in and of itself is any reason to get excited. But people are getting excited about the statement that things are getting easier to predict,” said Jim Kedersha, analyst at Adams Harkness & Hill.

Shares of San Jose-based JDS have dropped 87% since the beginning of the year, outpacing a 42% fall in the broader Nasdaq composite index, as demand sagged for fiber-optic components.

Kedersha said JDS’ sales guidance was below his estimate of $375 million, and that Monday’s news could signal order cancellations were slowing, although his checks had shown the pace of new orders still had not rebounded.

Last week, Credit Suisse First Boston raised its rating on JDS shares to a “buy,” but cut first-quarter sales targets by 18% to $310 million. It said it was optimistic about JDS’ ability to survive with cash reserves of $1.8 billion.

JDS said job cuts were ahead of schedule, with the company’s total head count now at 14,000, down from peak levels of 29,000 at the start of 2001.

“And while the downturn in our markets has not yet reversed, we believe we are beginning to see the early signs of stabilization at levels from which our industry can grow in the future,” Straus said.

Analysts polled by Thomson Financial/First Call were expecting first-quarter sales of $357.4 million, less than half the year-earlier revenue figure of $786 million.

JDS has said it expected restructuring efforts to result in break-even financial results at a sales level of $350 million.

It is slated to release its results on Oct. 25.