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Network gear maker JDS Uniphase to split into two

(Reuters) - Network gear maker JDS Uniphase said it would split into two separate public companies as it looks to expand in the data communication market and strengthen its network business.

Shares of JDS Uniphase, worth $2.78 billion as of Wednesday's close, rose about 12.5 percent in extended trading after the company also reaffirmed its current-quarter forecast.

The company said on Wednesday it would separate its communications and commercial optical products business through a tax-free spin-off to shareholders.

JDS Uniphase said the new standalone company would focus on commercial lasers and 3-D sensing applications.

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The company said its network gear business would focus on products to keep up with the industry's transition to software defined networking (SDN), while the optical security business would function as a separate unit within the broader company.

JDS Uniphase said Chief Executive Tom Waechter would lead the standalone network company.

JDS Uniphase's network service business, like that of other network gear makers, has been hurt by a delay in orders from telecom operators, its main customers, largely due to a spate of consolidation in the U.S. telecom and cable sectors.

The company said it expects to save $50 million in costs, adding that it expects cash expenses of between $75 million and $100 million to obtain the savings.

The separation, along with issuance of shares in the new communications company, is expected to close by the third quarter of 2015, JDS Uniphase said.

The company, which reported a 6.4 percent increase in fourth-quarter revenue, reaffirmed its first-quarter profit forecast of 8-12 cents per share and net revenue of $405-$425 million.

Analysts are expecting the company to earn 10 cents per share and revenue of $418.1 million, according to Thomson Reuters I/B/E/S.

Centerview Partners and Goldman, Sachs & Co are the company's advisers on the separation.

JDS Uniphase's shares rose to $13.62 in after market trade on Wednesday. Up to Wednesday's close the stock had risen 1.6 percent since it reported results on Aug. 12.

(Reporting by Abhirup Roy and Anya George Tharakan in Bangalore; Editing by Savio D'Souza)