Robert DeFrancesco’s

TechStockProspector.com
March 9, 2011

Optical Carnage: JDS Uniphase (JDSU) Hit By Finisar

Blowback
JDS Uniphase (JDSU, $22.31) shares are down more than 12% today on heavy
volume following weaker than expected guidance from optical-components
competitor Finisar, which is seeing its shares get a shellacking of 35%.

Finisar management blamed the revenue shortfall for its April quarter (guidance of
$235 million to $250 million, vs. the consensus of $268.5 million) on an inventory
correction in the heretofore fast-growing ROADM segment, saying that Chinese
manufacturers had double booked and now must work through a glut of
components.

When questioned on the earnings call if some of the shortfall could be blamed on
competition, Finisar management said that simply was not the case. But it’s
interesting that JDS Uniphase recently offered strong guidance for its optical-
communications unit: March quarter revenue is expected to be up 6% to 10%
sequentially. Something doesn’t add up.

JDS Uniphase shares have rocketed higher this year— the stock ended 2010 at
$14.48 and hit a high of $29.12 on February 14—so it makes sense that some
traders would rush to the exits on this Finisar breakdown.

Here’s some of the damage today in the optical sector:

Finisar (FNSR, $25.93)—DOWN 35.2%

Opnext (OPXT, $3.09)—DOWN 17.3%
Oclaro (OCLR, $13.90)—DOWN 16.3%
Oplink (OPLK, $21.73)—DOWN 15.1%
JDS Uniphase (JDSU, $22.31)—DOWN 12.1%
Juniper Networks (JNPR, $43.16)—DOWN 2.9%
Ciena (CIEN, $25.11)—DOWN 2.2%

For more information on the optical sector, visit TechStockProspector.com

Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20

years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street.
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