NEW YORK (AP) -- Shares of JDS Uniphase rose Friday following positive results for one of the company's competitors and optimistic commentary from an analyst.
THE SPARK: JDS rival Finisar Corp. gave a stronger-than-expected outlook for the fiscal third quarter. The fiber optic products maker said revenue is picking up because of greater demand for bandwidth used in the distribution and viewing of video, images, and digital information. It said data centers are growing and connections are getting longer and are being made at higher speeds.
THE BIG PICTURE: JDS Uniphase Corp. makes equipment for optical communications networks. Its technology is used by communications companies to test the quality of their networks. The company also makes optical transponders and other optical equipment used for sending information over fiber optic cables.
ANALYSIS: Jefferies & Co. analyst James Kisner said Finisar's report is good for JDS Uniphase and said the company should benefit from greater spending on telecommunications equipment and 100G Ethernet transceiver and transponders.
Piper Jaffray analyst Troy Jensen said Friday that he is gaining confidence in JDS Uniphase's competitive position, saying the company should take a bigger share of several important markets. He said the company has an important opportunity in China, where it could sell more communications measuring equipment and optical components, and its data communications business is reporting solid growth.
Jensen rates JDS Uniphase shares "Overweight" with a price target of $16.
SHARE ACTION: JDS Uniphase stock rose 50 cents, or 3.6 percent, to $14.45 in afternoon trading. The Milpitas, Calif., company's shares slumped following its recent fiscal-fourth quarter report, but are up 8.7 percent in September.