The Grim Reaper Descends On JDS

By Susan Rush
from BroadbandWeek Direct, April 26, 2002

JDS Uniphase Corp. is still struggling to balance its books amid an ongoing spending slowdown. After the market closed yesterday, the optical networking gear provider posted a $4.3 billion net loss for the quarter ended March 30, prompting more layoffs.

JDS' revenue tumbled 72 percent from $920 million a year ago to $262 million in its third fiscal quarter. The company posted a net loss of $4.3 billion, or $3.19 a share. This quarterly loss marks the fifth straight quarter JDS has reported a loss of more than $1 billion.

As the demand for optical networking gear continues to wane, the company is taking further steps to cut costs. To save an additional $165 million in annual costs, JDS plans to eliminate 2,000 jobs and close plants. "Today we are announcing further actions under our Global Realignment Program that we believe are necessary to match our expense structure to the current and anticipated telecommunications industry environment," JDS Chief Executive Jozef Straus said in a statement. The company eliminated more than 16,000 jobs last year as part of its Global Realignment Program.

During the quarter, JDS wrote off $3.9 billion related to goodwill and other assets that have declined in value - the write off reflects the industry lowered forecast for optical components. The company ended the quarter with $1.5 billion in cash.

Looking ahead, the company, which has dual headquarters in San Jose and Ottawa, Canada, expects sales to fall to between $210 million and $230 million in its fiscal fourth quarter, which ends June 29.

As of 11:23 a.m. EDT, JDS shares were down 45 cents to $4.58, falling below its previous 52-week low of $4.74. Shares of the company's competitors also dipped slightly in mid-day trading. Nortel Networks and Lucent Technologies' stock prices were down 2 percent.