Juniper Cruises Through Q1
It's an interesting time for the company, because Juniper is finally reporting full earnings statements again after dealing with some issues around stock options back-dating. Meanwhile, another handful of top executives have left, reopening questions about the executive turnover Juniper has seen in the past few years. (See Juniper Catches Up, Writes Down and Will Juniper Be Burned by the Churn?)
For its first quarter, ended March 31, Juniper reported net income of $66.6 million, or 11 cents per share, on revenues of $626.9 million, compared with net income of $71 million, or 12 cents per share, on revenues of $595.8 million the previous quarter. (See Juniper Reports Q1.)
For its first quarter a year ago, Juniper reported net income of $75.8 million, or 13 cents per share, on revenues of $566.7 million.
Juniper's non-GAAP net income of 19 cents per share matched analyst expectations as tallied by Reuters Research .
On a conference call with analysts today, Kriens said Juniper shipped more than 200 units of its core routers, the T-series and TX, during the first quarter. Juniper also got its first smattering of revenues from the MX960, an Ethernet platform that covers a hole in the company's product offerings, particularly when it comes to IPTV and similar services. (See Juniper Antes Up on Ethernet (Finally).)
"In aggregate, the market that we participated in grew faster than we did last year," Kriens said. "We have the additional opportunity to participate, with our MX products, in a segment we were not nearly as active in, in 2006."
Analysts on the call pointed out some other touchy spots though. Nikos Theodosopoulos of UBS Investment Bank noted Juniper is losing money on its Service Layer Technologies (SLT) business, which consists mainly of the NetScreen acquisition and is a key part of Juniper's ambitions in the enterprise. For calendar 2006, the SLT group reported operating losses of $12.8 million on revenues of $479.9 million.
Kriens noted that Juniper sells routers to the enterprise, too, so a bad number from SLT isn't an indictment of the entire enterprise business. Still, he admitted that "there is a gap in the contribution from the enterprise business relative to that of the service provider business." Kriens hinted that Juniper expects the SLT group to get back to profitability this year.
The first quarter saw Juniper finally cash in on $50 million in revenues from Verizon Communications Inc. (NYSE: VZ). Those revenues were deferred a year ago –- apparently for esoteric bookkeeping reasons, as the products had already been received on Verizon's end. That amount was originally supposed to be $25 million to $35 million, but it grew to $40 million with Juniper's fourth-quarter earnings, and it's now apparently up to $50 million. (See Juniper Defends Core Business in Q1 and Juniper Talks Up 2007.)
That $50 million will make for some screwy numbers. Verizon represented more than 15 percent of Juniper's revenues in the first quarter, something that's not likely to happen again. And Kriens noted Juniper will probably get a market-share boost from analyst firms that track vendor revenues.
Juniper's forecasts for its second quarter -– revenues of $640 million to $650 million, and earnings of 20 cents a share –- were on par with Wall Street expectations.
Juniper stock was down $0.95 (4.5%) at $20.16 in after-hours trading on Monday.
— Craig Matsumoto, West Coast Editor, Light Reading