JDSU

About JDSU

JDS Uniphase (JDSU) is drawn to the warming glow of optical networks. Its communications test and measurement division makes instruments and test tools used to help deploy and optimize communications equipment and broadband networks. The communications and commercial optical products unit produces optical transmission and transport products, lasers, – more... and solar cells and receivers sold to makers of network and other equipment manufacturers. Advanced optical technologies makes optical coating and holographic technologies to prevent counterfeiting in national currencies, as well as in products in commercial markets such as pharmaceuticals and consumer electronics.

Geographic Reach

The company's key manufacturing locations are in China, France, Germany, and the US, while its main manufacturing partners' facilities are in China, Malaysia, Mexico, and Thailand. The US makes up 40% of JDSU's sales.

Operations

JDSU divides its business into three segments, each of which has its own engineering, manufacturing, sales, and marketing groups. Communications Test and Measurement (CommTest) is its largest segment at about 45% of sales. CommTest provides test instruments, software, and product support services that help with the deployment of communication equipment and broadband networks. It also provides test products and services for private enterprise networks.

The Communications and Commercial Optical Products (CCOP) segment generates about 40% of sales and serves the optical communications, laser, and photovoltaic markets. Optical communications products include transponders, transceivers. modules, and amplifiers for transmission and transport of video, audio, and text data over fiber-optic cables. Its range of solid-state, fiber, diode, and gas lasers are used in everything from biotechnology and imaging to materials processing and precision machining.

Advanced Optical Technologies (AOT) is the smallest segment. It provides advanced optical technologies such as color-shifting pigments and thin-film coatings used in products such as night-vision goggles, satellite solar covers, medical instrumentation, information displays, office equipment, 3D cinema, and gesture recognition. Its pigments safeguard the currencies of more than 100 countries, including China, the US, and those in the European Union.

Sales & Marketing

JDSU markets its products to telecommunications and cable service providers, OEMs, government agencies, distributors, and partners worldwide. Each segment has a dedicated sales force, and each segment is working to expand both direct selling and distribution opportunities in emerging geographic markets

JDSU's customers include some of the world's largest communications service providers (AT&T, TimeWarner); OEMs (Alcatel-Lucent, Ericsson); and corporate enterprise customers (Cisco Systems, Hewlett-Packard, IBM). The company's CommTest and CCOP businesses share many of the same customers, but its AOT unit sells to a broader range of markets, with customers that include 3M, Lockheed Martin, and DuPont.

Financial Analysis

After JDSU's sales in fiscal 2011 leapt nearly 25%, in fiscal 2012 (ended June) revenue fell back 7% to $1.7 billion. The company attributed the decrease to a stifling global economic climate, the flooding in Thailand, and expected price reductions. Areas that grew included products in instruments, customer experience management, and pluggable optics and fiber lasers. Like revenue, after JDSU's first profitable year of the past decade in 2011, the bottom line fell back into the red for 2012, with losses of more than $55 million. Cost of sales fell by about only 5%, while operating expenses grew 2%, headlined by a nearly 3% uptick in R&D spending.

Strategy

JDSU develops its technologies largely in response to the major trends that influence its three business segments. Adoption of smartphones, demand for high-speed broadband access to support video and network traffic, growing use of social networking, and increased cloud computing, for example, dictate how CommTest and CCOP respond to customer needs. The growing threat of counterfeiting primarily impacts its AOT business.

Every stage of JDSU's products, from design to implementation and training, is driven by collaborative engagement with its customers. Strong relationships with its clients are critical to developing and delivering innovative products that keep the company competitive. In 2012 JDSU brought more focus within its smallest segment, advanced optical, by agreeing to sell its holographic security business, which primarily addresses the transaction card market, to OpSec Security. That sale will allow the company to give more attention to the segment's core expertise in anti-counterfeiting.

Mergers & Acquisitions

In 2012 the company acquired GenComm, a Seoul-based provider of wireless test and measurement products. The deal added mobile products expertise and expanded JDSU's presence in the Asia/Pacific region. Also that year JDSU bought Vancouver-based wireless network test systems provider Dyaptive Systems. Dyaptive's test systems emulate network usage scenarios for help in managing traffic on mobile networks.

In 2010 JDSU purchased the network solutions business of Agilent Technologies for $165 million. The acquisition brought network protocol test and drive products to the company and gives JDSU a market lead in wireless test instruments and systems. – less

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