When fiber-optic specialist JDS Uniphase (NASDAQ:JDSU) reported its fiscal fourth-quarter and full-year 2005 earnings late Thursday evening, Wall Street basically took the bad news in stride, dropping the share price by only a penny. Excluding a $62.7 million impairment charge, attributed mainly to writing down "goodwill," the company matched analysts' expectations of losing $0.02 per share on a non-GAAP basis in its core business during Q4.

Investors may have also noticed that JDS's balance sheet experienced a shifting of assets from short-term investments into cash. Well, as it peered into the future, JDS expected its first fiscal quarter of 2006 -- the one it's in now -- to finish with core revenues of about $168 million. If that figure proves accurate, it would amount to about a 14% revenue decline over fiscal Q1 2005. To avoid that unfortunate result, JDS completed its acquisition of telecom equipment tester Acterna in early August. With Acterna's business thrown into the mix, JDS expects to book about $250 million in sales this quarter.

The terms of the acquisition call for JDS to pay out $450 million cash for its new business. To finance the purchase, JDS cashed out about $400 million worth of its investments before June 30, when the quarter ended. By now, that cash should already be gone from the balance sheet and in the pockets of Acterna's former shareholders.

Revenues for the full year, meanwhile, grew by 12%, while the firm's net loss more than doubled. Key to the increased loss was, of course, the asset/goodwill writedown. Absent that, the company's operating loss would actually have been slightly less in fiscal 2005 than in fiscal 2004.

However, JDS continued to face severe pressure on its margins, with gross margins falling from 22.9% last year to 17.6% in fiscal 2005. Overall, it seems the company's 12% sales growth simply failed to keep pace with its 20% increase in cost of goods.

Meanwhile, when we next hear from JDS in a couple of months, its cash level should be not the $1.3 billion mentioned in last week's press release -- an amount that didn't subtract out long-term debt in any event -- but something closer to $350 million, thanks to the payout for Acterna. Whether Wall Street will be as forgiving the next time around remains to be seen.

Fool contributor Rich Smith does not own shares in JDS Uniphase.