Fibre-optic equipment communications maker JDS Uniphase Corporation revised its outlook for the current and forthcoming quarter on Thursday.
The company said it anticipates sales for its fourth quarter ending June 30, 2001 will be approximately $600 million as compared to earlier guidance of $700 million. This revised outlook reflects continued weakness in telecommunications carrier spending and inventory reductions by the company’s system provider customers.
“The business downturn has been rapid, steep and unprecedented, and the continuing lack of visibility from our customers suggests to us that a cautious outlook continues to be warranted for the short term,” Jozef Straus, co-chairman, president and CEO, said in a statement.
Straus said that the company’s order levels reflect lower carrier capital spending and the resulting desire of customers to reduce their inventories sharply. However, with new product programs and the company’s “global realignment program in place, Strauz said the company’s fortunes would improve.
JDS Uniphase anticipates sales of $450 million for its first quarter of fiscal 2002 ending September 29, 2001.
The company said it is carefully reviewing its expense structure in connection with the preparation of its fiscal 2002 operating plan to determine the changes, including additional charges under the company’s previously announced “global realignment plan”, required to respond to this revised sales forecast.
The company said it is not providing guidance for later periods at this time.
The lowered sales forecast will cause the company to record inventory write-downs in its fourth quarter ending June 30, 2001.
The company said it would reserve inventory amounts for specific components and modules with on hand balances in excess of six months’ supply, and the lowered forecast will require an increase in excess inventory reserves of $225 to $250 million.
The inventory write-downs are expected to result in a fourth quarter of $0.06 to $0.08 per share after exclusion of merger and acquisition related charges and charges resulting from the company’s global realignment program. Without the inventory write-downs, the company said it anticipates such results would be profitable.
The company said its balance sheet remains sound with over $1.4 billion in cash and money market instruments. The company has not raised funds recently with debt or equity financing.
Earlier this week JDS announced the retirement of Charles Abbe, its president and chief operating officer of the company’s WDM (wave divisional multiplexing), switching and thin film business group [see story – JDS Uniphase undertakes the executive shuffle.
The company also announced the appointment of Gregory Dougherty as executive vice-president and chief operating officer of JDS Uniphase.