The optical components supplier posts 171% growth in Q1 sales.
At last some good news for optoelectronics. JDS Uniphase reported late yesterday its excellent Q1 results. Sales for the quarter were up 171% compared to the same period last year with quarter-to-quarter growth forecast in the high teens. It is hope that these figures will return some stability to the volatile sector. Investors have had the jitters since Lucent announced a net loss of $225 million this quarter and Nortel reported a disappointing 90% revenue growth (compared to analysts’ expected 120%).
JDS has rightly reduced its reliance on Nortel and Lucent. Together these two giants now represent only 10% of revenues compared to 36% last quarter. Diversification is a good strategy, but doesn’t stem from any concern JDS may have about demand for its products. JDS says that it will continue to expand its manufacturing base by four times every 18 months. Indeed, there is now a growing demand from the metro area as well as long haul for JDS’s components. Estimates suggest that the market for optical networking products in the metro area will be 4 times greater than that of long haul.
But these latest results should also be read as a health indicator of the optical fiber market. After all, Lucent’s troubles stem from past mistakes and lack of large contracts while Nortel has suffered because it did not fulfil expectations – it still grew its revenues by 90%.
With the ever-increasing expansion of the Internet, the optoelectronics sector can only grow further. JDS’s results simply demonstrate that optic fibers are alive and kicking.
