Tom Waechter’s latest CEO gig lasted all of 10 days.
Viavi, one of two companies created from the Aug. 1 split of JDSU, announced this afternoon that Waechter has stepped down as CEO to pursue other interests. Viavi Chairman Richard E. Belluzzo will act as interim CEO while the company searches for Waechter’s replacement. Belluzzo, who joined the board of JDSU in 2005, is a previous COO of Microsoft and former CEO of Quantum Corp.
Waechter’s departure is a surprise. JDSU’s split was announced nearly a year ago. Every indication since then had been that Waechter was going to stick around to run Viavi, which includes JDSU’s test and measurement products, plus software-based businesses such as analytics and service enablement. We even interviewed him just last week, when he described Viavi’s plans for software-defined networking (SDN).
JDSU also announced its fourth-quarter earnings today, under the Viavi name. (Viavi and Lumentum will report earnings separately hereafter; think of this as a last hurrah for JDSU.) The combined JDSU reported revenues of $428 million and non-GAAP net income of 13 cents per share for the quarter, which ended June 27.
Tale of Two (or More) Companies
Waechter joined JDSU in 2007 as the company began diversifying beyond optical components — the lasers and other photonic pieces that drive fiber-optic networking. By the end of the 90s, optical networking was a hot business with stratospheric stock valuations, and JDSU made some massive acquisitions to position itself at the top of that market.
But that left the company with excess baggage once the bubble burst, circa 2001. In the ensuing years of oversupply — both of vendors and the amount of fiber they’d planted in the ground — margins on optical components got pushed into single digits or even negative numbers.
JDSU’s answer was to diversify through acquisitions. Test and measurement, with its higher and more stable margins, was a particular focus, and Waechter was brought into the company to lead that business. (He became CEO in 2008.)
JDSU also had its hand in some some quirky businesses. It sold color wheels for projectors and the color-shifting pigments you see on U.S. currency.
The acquisitions boosted margins, but JDSU began selling a pretty crazy mix of technologies. It’s not hard to see why the company chose to split up.
In fact, outsiders had suggested for years that the company should divide itself, with the most popular idea holding that JDSU could spin off or even sell the optical components division. Even now, optical side Lumentum is considered an acquisition target in the long term, with analysts pointing out that JDSU competitor Finisar would make a logical buyer.
Viavi shares were trading up 8 cents, or 1 percent, at $5.93 after-hours.