Q1 Losses Mean Cuts at JDSU
MILPITAS, Calif., Nov. 6, 2008 – In light of continuing economic uncertainty and following the posting of its third consecutive quarterly loss, JDSU said it will combine its optical components and laser businesses into a single division, eliminating 400 jobs. The company will also consolidate its research and development sites, drop underperforming communications products, close several factories and outsource some manufacturing.
JDSU posted a net loss of $16.4 million for the first quarter of 2009, narrowing last quarter's nearly $30 million loss. The company posted a loss of $6.9 million for the same quarter last year. Net revenue for the quarter was $380 million, down from the $390 million posted in the fourth quarter.
JDSU provides communications test and measurement solutions and optical products for the telecommunications market and optical solutions for applications including medical/environmental instrumentation, semiconductor processing, display, and aerospace and defense. The company operates four business segments: Optical Communications, Communications Test and Measurement, Advanced Optical Technologies, and Commercial Lasers.
Revenue for the first fiscal quarter of 2009 in the Communications Test and Measurement segment was down 3 percent from last quarter to $165 million, and down 4.6 percent year over year. First quarter Optical Communications revenue of $140.6 million decreased 3 percent compared to the previous quarter, but grew 21 percent compared to the first quarter of fiscal 2008, the company said.
The Commercial Lasers business reported revenues of $21.4 million, down 3.2 percent from the previous quarter and up 7.5 percent year over year. Advanced Optical Technologies saw a revenue increase for the quarter of 1.1 percent to $53.5 million, up 11.5 percent compared to a year ago.
JDSU CEO Kevin Kennedy announced the belt-tightening plan last week during a conference call to discuss Q1 earnings. Kennedy also announced he is leaving JDSU at the end of December to become president and CEO of another company, later revealed to be communications systems provider Avaya. Kennedy will remain on JDSU board.
To simplify the company's structure and reduce costs, JDSU will combine its Optical Communications and Commercial Lasers businesses into one segment called Communications and Commercial Optical Products, Kennedy said during the Oct. 29 conference call. Alan Lowe, currently head of Commercial Lasers, will become president of the new segment, while Optical Communications President David Gudmundson will serve in an advisory role.
Over the next three or four quarters, the company will also cut its research and development sites from 19 to 12, close several factories and prune its product portfolio of underperforming products, Kennedy said, as well as increase its contract manufacturing. It is also moving its laser manufacturing to its Asia facility and to other manufacturers.
During the first quarter of 2009, 203 employees were notified they were being terminated, the company said, 200 in North America, two in Asia and one in Europe. Of those, 181 were in manufacturing, 19 in research and development and 3 in sales or administration. During the first quarter of fiscal 2008, 41 employees were let go, 27 in manufacturing, 4 in R&D and 10 in sales or administration. Twenty-three were located in Asia and 18 in North America.
For more information, visit: www.jdsu.com