2009 Cts V

JDS Uniphase Rebounds From 14 Years of Losses With New Products

JDS Uniphase Corp. (JDSU) Chief Executive Officer Thomas Waechter is poised to close the books on the company’s first annual profit since 1996, the fruit of moves into products as varied as 3-D glasses and currency pigments.

The last time JDS Uniphase was in the black for a full year, Bill Clinton was finishing up his first term as president, and Google Inc.’s Larry Page and Sergey Brin were Stanford graduate students working on a search engine called “BackRub.” Since then, the company has lost more than $68 billion.

JDS Uniphase, the biggest maker of fiber-optic testing equipment, has clawed its way back to profitability after digesting acquisitions and investing in new products. When Waechter became CEO in 2009, he stepped up research spending, even though the economy was mired in recession. Innovations developed during the slump now account for about two-thirds of revenue in the company’s optical-components business and 45 percent of its communications-test businesses, he said.

“We made some pretty large bets, and that’s paying off for us now,” Waechter said in an interview.

Now he aims to parlay its broader focus -- and improving bottom line -- into greater recognition. The company has expanded beyond its roots in optical components, which are used to build communications networks. To reflect that, the Milpitas, California-based company adopted a new slogan last July: “You know us because you depend on our technology every day.”

Its technology is used in the pigments on U.S. dollars, holograms on debit cards, optical coatings on 3-D movie glasses, cells in solar panels, and the lasers in motion-sensing video- game consoles. It also helps ensure the quality of video delivered over the Internet.

The expansion has helped fuel profit and sales. JDS Uniphase, better known as JDSU, posted net income of $62.3 million for the nine-month period ended April 2, compared with a loss of $63.3 million a year earlier. Analysts project profit of more than $50 million for the fiscal fourth quarter, which ends July 2.

“They’ve done an excellent job turning the ship,” said Nathan Johnsen, an analyst at Pacific Crest Securities in Portland , Oregon . “Over the last few years, they’ve made a concerted effort to exit out of the businesses that are lower margin and less interesting.”

JDSU’s run of losses stemmed in part from its merger of JDS Fitel Inc. and Uniphase Corp. in 1999, which created the biggest maker of fiber-optic components. At the time, a flood of Internet startups was increasing the volume of data traffic. Companies such as Lucent Technologies Inc. also were buying parts from JDSU to boost network capacity. The stock peaked on March 6, 2000, closing at a record $1,172.25.

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