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Feb. 2 (Bloomberg) -- JDS Uniphase Corp., the biggest maker of fiber-optic testing equipment, fell in U.S. trading after UBS AG downgraded the stock on concern that the company is cutting prices.
The shares tumbled 7.2 percent to $12.19 at the close in New York, the biggest drop in more than three months. The stock is down 32 percent in the past 12 months.
UBS lowered its rating to “neutral” from “buy,” citing price cuts of 6 percent this quarter for the company’s optical products. In a separate report, Morgan Stanley analysts also expressed concern about the lower prices, saying they were putting pressure on profit margins. The cuts are affecting rivals Finisar Corp. and Oclaro Inc. as well, analysts said.
“Struggling competitors apparently pushed pricing lower,” Ehud Gelblum, an analyst at Morgan Stanley in New York, said in the report.
JDS Uniphase, based in Milpitas, California, is forecasting sales of $410 million to $425 million for the fiscal third quarter, which ends in March. Analysts estimate $419.3 million on average, according to a Bloomberg survey.
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