Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of telecom networking equipment maker JDS Uniphase (VIAV -0.25%) soared 18% today after the company's quarterly results easily topped Wall Street expectations.
So what: JDS shares have slumped over the past couple of years on slow telecom spending, but strong second-quarter results -- adjusted EPS of $0.18 on revenue of $429.4 million versus the consensus of $0.14 and $424.2 million, respectively -- reinforces recent optimism over rebounding demand. Adjusted operating margins even expanded from 9.2% in the previous quarter to 11.3%, suggesting that its competitive position is improving as well.
Now what: Management now expects third-quarter revenue of $405 million-$425 million, pretty much in line with Wall Street's view of $413 million. "We are pleased with the progress we've made in aligning our product portfolio with customer spending priorities, resulting in a high percentage of revenue from new products and a positive impact on financial results," said CEO Tom Waechter. "We are well-positioned for growth opportunities in 2013." With the stock now up a whopping 50% over just the past three months, however, I'd wait for some of the exuberance to fade before buying into those opportunities.
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