) to neutral from buy.
Analyst Dave Kang says first-quarter sales were up 11.5% sequentially, and 32% year-over-year. He says the 1-cent, non-GAAP loss, compares to the 1-cent loss consensus. He notes gross margins declined to 22.7% from the fourth-quarter's 23.9%, due to stronger-than-expected communications sales. Operating expenses increased to $60.5 million, or 31.1% of sales, compared to 33.2% in the fourth-quarter of fiscal 2004.
Kang says JDS Uniphase expects second-quarter sales to be flat to down by 8% sequentially. He widens the 1-cent fiscal 2005 (June) loss estimate to a 2-cent loss, and cuts 5 cents fiscal 2006 earnings-per-share estimate to 4 cents. On reduced estimates, he cuts the $4.40 target to $3.60 and downgrades the stock.