JDSU (JDSU) share are getting crushed today on investor disappointment with the company’s results for the fiscal third quarter ended April 3.
As I noted in a post late yesterday, the company reported revenue for the quarter which fell short of expectations. Analysts report that that issue was in the company’s test and measurement business. Raymond James analyst Todd Koffman points out that sales in the unit were only $146 million, well short of his $180 million estimate. “Management blamed the shortfall on materials shortages and pricing pressure,” he notes, “but we believe additional procurement issues may have plagued the company.”
Citigroup analyst Kevin Dennean today repeated his Buy rating on the shares, and actually increased his price target to $17.50, from $11.50; he says that the real story in the quarter was an improvement in optical components demand.
RBC Capital analyst Mark Sue, who has an Outperform rating on the shares, contends it was a mixed quarter. “JDSU missed, expenses are going higher and to top it off there’s pricing pressure in the T&M segment,” he writes. “But the top line miss was due to supply constraints, bookings are at a record level of $400 million, the near-term expense increase is related to [an] acquisition and pricing may be primarily driven by one competitor.” He actually raised EPS estimates.
Bernstein Research analyst Jeff Evenson notes additionally that the company’s acquisition of Agilent’s network solutions division will be a drag on profitability through the the September quarter. He keeps his Market Perform rating, but boosts his EPS estimates for both this year and next year, and raises his target on the stock to $17, from $16.
JDSU shares, despite plenty of defenders on the sell side, is down $2.50, or 18.3%, to $11.20.
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