New Communications Test and Measurement Business Drives Revenue Growth and Gross Margin Improvement

San Jose, California, November 9, 2005 – JDSU today reported fiscal 2006 first quarter results, for the quarter ended September 30, 2005.

On a GAAP basis, net revenue for the first quarter was $258.3 million, and GAAP net loss was $67.0 million, or $0.04 per share.   This compares to net revenue of $170.9 million and a GAAP net loss of $145.7 million, or $0.10 per share, reported for the fourth quarter of fiscal 2005, and to net revenue of $194.5 million and a GAAP net loss of $36.0 million, or $0.02 per share, for the first quarter of fiscal 2005.

On a non-GAAP basis, net loss for the first quarter was $16.2 million, or $0.01 per share, as compared to a non-GAAP net loss of $21.8 million, or $0.02 per share, for the fourth quarter of fiscal 2005, and to a non-GAAP net loss of $14.1 million, or $0.01 per share, for the first quarter of fiscal 2005.

On a non-GAAP EBITDA basis (non-GAAP operating income/(loss) before interest, taxes, depreciation and amortization), the Company lost $5.1 million for the quarter ended September 30, 2005, as compared to a loss of $19.7 million for the fourth quarter of fiscal 2005, and a loss of $5.9 million for the first quarter of fiscal 2005.

“Reflecting JDSU’s more diversified business model, we achieved significant gross margin improvement driven by the strong performance of our recently acquired Communications Test and Measurement business,” said Kevin Kennedy, Chief Executive Officer of JDSU.  “Non-GAAP gross margin of nearly 32% represented our strongest result in more than three years, and we remain on track to achieve $88 million of previously announced annualized cost savings by the end of fiscal 2006.”

Financial Overview – Fiscal 2006 First Quarter Ended September 30, 2005

• On a non-GAAP basis, net revenue of $259.2 million increased 52% from the previous quarter and 33% from the fiscal 2005 first quarter.   Fiscal 2006 first quarter results included a partial quarter contribution from the recently acquired Communications Test and Measurement segment.
• Optical Communications net revenue was $100.5 million, and represented 39% of total non-GAAP net revenue.   This revenue excluded $3.5 million of instrumentation revenue that, prior to the fiscal 2006 first quarter, was included in the Optical Communications segment. 
• Communications Test and Measurement net revenue was $95.4 million, or 37% of total non-GAAP net revenue, including the $3.5 million of instrumentation revenue noted above.
• Commercial and Consumer net revenue was $63.3 million, or 24% of total non-GAAP net revenue. 
• North American customers represented 62% of net revenue. European and Asia-Pacific customers represented 23% and 15% of net revenue, respectively.
• GAAP gross margin was 20.0% of net revenue, and non-GAAP gross margin was 31.6% of net revenue.
• GAAP operating expenses were $141.8 million, and non-GAAP operating expenses were $99.6 million.
• The Company held $827.5 million in cash, cash equivalents and short-term investments at the end of the first quarter.  
• The Company consumed approximately $349.3 million in cash and short-term investments during the first quarter, including approximately $459.6 million in cash for acquisition related activity.
  

Business Outlook

Management provided the following financial guidance.  For the quarter ending December 31, 2005, and reflecting the first full quarter contribution from the recently acquired Communications Test and Measurement segment, the Company expects revenue to range between $300 to $320 million.

Conference Call

The Company will discuss these results and other related matters at 2:00 p.m. Pacific Time on November 9, 2005 in a live webcast, which will also be archived for replay on the Company's website at www.jdsu.com/investors.  This press release is being furnished as a Current Report on Form 8-K with the Securities and Exchange Commission, and will be available at http://www.sec.gov/.

About JDSU
JDSU (NASDAQ: JDSU; and TSX: JDU) is committed to enabling broadband & optical innovation in the communications, commercial and consumer markets. JDSU is the leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers.  Furthermore, JDSU is a leading provider of innovative optical solutions for medical/environmental instrumentation, semiconductor processing, display, brand authentication, aerospace and defense, and decorative applications.  More information is available at http://www.jdsu.com/.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include: (i) any anticipation or guidance as to the amount of future revenue or the likelihood, timing or amount of expected cost savings or profitability improvements; (ii) statements regarding the preliminary purchase price allocations and adjustment related to the acquisition of Acterna; and (iii) the Company's beliefs regarding the purpose, usefulness and efficacy of non-GAAP results and the measures and items the Company includes in the same, as well as any benefits to investors the Company believes its non-GAAP measures provide.   These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation, the following:   (i) the Company's ability to predict future financial performance continues to be difficult, as among other things, visibility remains limited, we are experiencing significant quarter over quarter fluctuations in product mix, average selling prices continue to decline across our product portfolio, we continue to experience execution challenges which limit our revenue and impair our profitability, and we are experiencing declining, but variable, benefits from certain transient items;   (ii) the Company’s cost improvement efforts may not be successful in achieving their expected benefits (including, among other things, cost structure, gross margin and other profitability improvements), due to, among other things, shifts in product mix, selling price pressures, costs and delays related to product transfers to lower cost manufacturing locations and associated facility closures, costs and delays associated with facility and asset divestitures, and execution concerns; (iii) ongoing efforts to design and introduce products that meet customers' future needs and to manufacture such products at competitive costs, and with acceptable quality and profitability, may not be successful; and (iv) final purchase price allocations and adjustments related to the Acterna acquisition may differ materially from our preliminary conclusions.

For more information on these and other risks affecting the Company's business, please refer to the “Risk Factors” section included in the Company's Annual Report on Form 10-K for the year ended June 30, 2005 filed with the Securities and Exchange Commission, as well as in other filings on Forms 10-Q and 10-K. The forward-looking statements contained in this news release are made as of the date hereof and the Company does not assume any obligation to update the reasons why actual results could differ materially from those projected in the forward-looking statements.

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Contact Information

Investors: Jacquie Ross, 408-546-4445, investor.relations@jdsu.com
Press: Jayme Curtis, 408-546-7028, jayme.curtis@jdsu.com

The following financial tables are presented in accordance with GAAP, unless otherwise specified.