Communication Equipment Maker on a Growth Trend

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The leader in communication equipment, JDS Uniphase Corporation (NASDAQ: JDSU) has been recognized the second time with the Frost & Sullivan's Global Market Share Leadership Award for its fiber optic and Ethernet communications test solutions. This is an attestation to the company's exemplary work in the field of innovation. It has also earned the 2012 Excellent Core Partner Award from Huawei for Optical Transport and Transmission Solutions. This honor is in recognition of its cutting edge technology having a high quality and timely deliverables.

The October release of the first quarter 2013 earnings of JDS Uniphase was not up to the mark, but it has earned fairly through its Optical Communications segment. The quarter’s revenue of $420.9 million was down $434 million quarter over quarter, but up from last year's $416.1 million. The earnings drop was majorly due to slower carrier spending in CommTest. However Optical Communications segment companies have solid results driven by ROADMs (up 11%) Tunable SFP+ (up 27%) and Super Transport Blade (up 18%) in the last quarter. 

Coming on to the peer group of JDS, its rivals Finisar Corporation (NASDAQ: FNSR) and Qualcomm (NASDAQ: QCOM) are also in line with new developments and acquisitions to increase their portfolio and revenue generation capacities.

The earnings of Finisar Corporation for the fiscal second quarter 2013 failed to impress the market. Though revenue was higher 5% from the last quarter, it was down 95% from the year ago period. This loss weighs heavily on the company's future revenue generation efficiency. However, it has earned good growth in sales from the tunable XFP transceivers and wavelength selective switches, including ROADM line cards. The compact design of its ROADM line card is an energy efficient solution gaining market traction which is expected to continue further. Also, the company has new tenders for its 6 gigabit SFP CPRI products for LTE base station deployment which will again impact positively on its earnings.

Qualcomm (which, I have covered in detail here) is targeting smartphone solutions and on the emerging markets which are the major growth drivers to its revenue. It has acquired EPOS development Ltd to develop new interactive mobile tools for its customers. The technology is far ahead of others allowing touch free gestures and pen interactions as the user input. Qualcomm's Snapdragon Processors carry this technology to enrich the user experience for Tablets, E-readers and smartphones. Additionally, the company's manufactured chips are placed in the top smartphones of Samsung, Apple, Google and Microsoft. The growth in the smartphone segment along with increasing number of connections of 3G and 4G among the emerging markets of India, China and the Middle East will be a boost for its long term revenue generation.

Moving on with JDS Uniphase, it has planned its development opportunities through acquisitions and innovative product lines.

Innovative Products

PacketPortal and PacketInsight

PacketPortal is a Smart Network Application Platform (SNAP), a Cloud based solution which is gaining market traction and winning customers in the first quarter with its high quality subscriber experience.

PacketInsight is a software-enabled network monitoring tool which offers better and speedy solutions to network carriers as against its competitors. JDS Uniphase is continually investing in such growth oriented products to expand its line and its market coverage.

Acquisitions

GenComm's acquisition provides a new business opportunity for JDS Uniphase in the emerging Asia-Pacific market. This deal will not only strengthen its position in Korea but will also give the company access to other Asian markets from where it has performed notably with 27% contribution in total revenue for the quarter. This acquisition will bring in new technologies and expertise which will help it to focus more on innovations in the field of 2G, 3G and emerging 4G networks.

Dyaptive Acquisition

This acquisition will also expand the portfolio of JDS Uniphase with high quality test solutions of Dyaptive. The combined offerings of both providers will bring in a cost effective and quality experience for the customers.

To conclude, the two acquisitions by JDS Uniphase will serve as a portfolio enhancer for the company with their efficient technologies. For the 1Q 2013, the GenComm segment reported growth of 27% year over year and is further expected to contribute as its target market is the Asia-Pacific which has outperformed over the Americas and EMEA. The recognition will drive in value proposition of JDS Uniphase and its product line which translates into increasing on the long run.


ShwetaDubey has no positions in the stocks mentioned above. The Motley Fool owns shares of Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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