Juniper Confidently Carries Q4

In reporting its quarterly results, Juniper Networks Inc. (Nasdaq: JNPR) beat fourth quarter 2003 revenue expectations by $25 million and said revenues were likely to increase in the first quarter of 2004.

Reported revenues of $207 million showed a 33 percent increase from the comparable period in 2002 and a 20 percent increase over third-quarter 2003 results (see Juniper Jumps on Good News), thanks partly to a new government contract and continued action with Asian carriers. Analysts had been expecting only $183 million in revenue during the quarter, according to Reuters Research.

"This quarter was exceptionally strong," says Juniper CEO Scott Kriens, during the company's conference call on Thursday afternoon.

After hours, shares rocketed up $2.53 (11.03%) to $25.46. Juniper's shares had risen $0.24 (1.06%) to $22.93 in trading on Thursday.

What happened? Kriens says the quarter carried a bit of pent-up demand, but it's also clear that Juniper's customers are becoming more confident in its products as they're gradually moving to packet infrastructures. "The world has not changed as much as our top-line gains indicate," he says. "Rather, Juniper continues to be in the right place, at the right time, with the right products."

The company reported a net profit of 4 cents a share, or $14.7 million. Excluding one-time items, Juniper earned 7 cents a share, beating analyst estimates by two cents. For 2003, it reported a net profit of 10 cents a share, or $39.2 million, on revenues of $701 million for its fiscal year ended December 31, 2003.

The biggest surprise came on the revenue side, where Juniper's quarterly revenue results surpassed even the rosiest expectations.

The enthusiasm being displayed in the after-hours stock market may reflect the fact the company expects growth to continue. The company said it expects revenues of about $210 million to $215 million for the first quarter. By way of comparison, Juniper's revenues for the first quarter of 2003 were $157.2 million.

There's no denying Juniper has had a busy quarter, and its partnership activity continues to be worth watching. Juniper gained ground with NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701), showed some increased payoff with Lucent Technologies Inc. (NYSE: LU), but lost face as Nortel Networks Corp. (NYSE/Toronto: NT) opted to use Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) as its core router supplier (see Juniper Extends Ties With NEC, Avici, Nortel Get 'Strategic', and China Deals Brighten Lucent's Day).

That said, LM Ericsson (Nasdaq: ERICY) and Siemens AG (NYSE: SI; Frankfurt: SIE) both provided more than 10 percent of Juniper's revenues for the quarter, a sign that those relationships are healthy.

Kriens also spoke of four customer wins that Juniper hasn't yet announced. He says AOL had deployed M and T series routers in its data center; Bloomberg is running its Bloomberg Anywhere service via Juniper routers; Global Crossing Holdings Ltd. used Juniper routers to enhance its VPN service; and Level 3 Communications Inc. (Nasdaq: LVLT) upgraded its core network with T640s.

Juniper also touted its win in the government's GIG-BE network, which was announced in December (see DISA Deal Is Done). Kriens notes that the design win is far more important than the revenue from that project, as it validates Juniper's technology over its competitors.

"The design win is a real benchmark," said Kriens of the GIG-BE win.

The company didn't have much to say on its acquisition hunt, something many have been watching, given its strong cash position and its ability to raise money relatively easily (see Juniper 'On the Prowl').

— Phil Harvey, Senior Editor, Light Reading