JDSU drops some low-speed test products

JDSU (NASDAQ: JDSU; and TSX: JDU) revealed May 1 that it will stop selling test instruments for certain low-speed wireline applications. However, the company isn’t yet detailing the specific products that have faced the ax.

The company revealed the move as it announced results of the third quarter of fiscal 2013, which ended March 30. JDSU incurred a $2.2 million charge for accelerated amortization of related intangibles during the quarter in light of its decision. The company also incurred $11.3 million in inventory related charges included in its cost of sales due to the action. Rex Jackson, CFO and executive vice president at JDSU, said to analysts on a conference call May 1 that the discontinued products contributed about $1 million of what he termed “low margin” revenue during the quarter.

Exactly which products JDSU has dropped from its test portfolio remains something of a mystery, however. Asked for details, corporate media relations spokesman Jim Monroe wrote in an email, “These are wireline-based test instruments that are no longer aligned with our customer’s priorities. As you know, we continue to focus our investment on mobility and software-based network visibility and control solutions like PacketPortal.” He wrote in a subsequent email that he could not provide additional details.

For the quarter, JDSU reported GAAP net revenue of $405.3 million and a net loss of $28.0 million ($0.12 per share). The revenue total was about $2 million higher than the same quarter of the previous fiscal year, but down $24.1 million from the prior quarter. “The March quarter experienced delayed carrier capex budget releases resulting in lower revenue than expected in our Communications Test and Measurement and Optical Communications businesses,” said Tom Waechter, JDSU president and CEO, via a press release.

The company expects its performance to improve, however. It forecasted non-GAAP net revenue of between $420 million and $440 million for the fourth quarter of fiscal 2013, which ends June 29, 2013.

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