JDSU revenues down but profit up in fiscal 2011 third quarter

JDSU (NASDAQ: JDSU) (TSX: JDU) reports it achieved $454.0 million in net revenue for the third fiscal quarter of 2011 and net income of $38.6 million ($0.16 per share) on a GAAP basis. That translates to a $19.5 million drop in revenue but an increase of $15 million ($0.06 per share) in income from the previous quarter.

The company’s third fiscal quarter ended April 2, 2011. In the previous quarter, it reported net revenue of $473.5 million and net income of $23.6 million, or $0.10 per share.

The company expects continued growth. For the fourth quarter of fiscal 2011, ending July 2, 2011, JDSU said it expects non-GAAP net revenue to be in the range of $455 million to $475 million. On a GAAP basis, net revenue for the third fiscal quarter of 2011 was $454.0 million and net income was $38.6 million, or $0.16 per share.

Year on year, JDSU performed quite well. In the fiscal third quarter of 2010, the company reported net revenue of $332.3 million and a net loss of $11.9 million, or $0.05 per share.

GAAP net income for the 3Q11 included a tax benefit of $34.9 million related to a release of deferred tax valuation allowance for a foreign jurisdiction. JDSU said it determined during the quarter that it is more likely than not such deferred tax assets will be realized.

Meanwhile, gross margin was 47.6% compared to 48.8% in the prior quarter and 44.1% in the third quarter of fiscal 2010. Operating margin was 12.1% compared to 15.3% in the prior quarter and 6.6% in the third quarter of fiscal 2010.

"In fiscal Q3 JDSU reported strong financial results with year over year operating income growth of nearly 150%, as our strategy to operate as a diversified technology company provides the ability to navigate fluctuations that may occur in any one business segment and continues to positively differentiate JDSU's performance," said Tom Waechter, JDSU's president and CEO. "We benefited again this quarter from the strong mix of new products as the result of our collaborative innovation initiative evidenced by market share gains in our optical communications and test and measurement businesses."

Quarter-on-quarter revenue gains (non-GAAP) in the Communications and Commercial Optical Products (CCOP; $209.4 million, up 9.6%) and Optical Communications ($184.7 million, up 9.7%) groups were counterbalanced by a revenue decline in the Communications Test and Measurement Group (down 18.2% on $189.2 million of revenue). On a non-GAAP basis, the CCOP represented 46% of total net revenue, with the test business accounting for 41.5%

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