Juniper Networks Inc. (Nasdaq: JNPR) put in a solid showing in reporting its third-quarter earnings, exceeding analyst expectations. Company officials also expressed more optimism about the market than they have in the past.

Juniper was up $0.42 in after-hours trading to $18.82.

The company reported a profit of $7.2 million or $0.02 per share for the third quarter, which ended on September 30. On a non-GAAP basis, excluding certain costs, Juniper earned $0.04 cents a share, putting it a penny ahead of the Thomson First Call consensus estimate.

Its revenues came in at $172.1 million compared with $165.1 million for the second quarter. Analyst consensus had been $166.8 million. This is the second quarter in a row that the company has exceeded official expectations.

But the biggest indicator that the company is turning a corner came during the company’s conference call. Unlike previous quarters, the company offered upbeat guidance for the coming quarter. Specifically, it expects revenues of $180 million and non-GAAP earnings of $0.05 per share in the fourth quarter of 2003.

In the third quarter, the company saw a good balance across edge and core platforms. It saw strong sales in the Americas and in Asia. Marcel Gani, the CFO, said he expects this diversification of product mix and customer base to help push the company’s growth in the fourth quarter. He also said that he expects sales in Europe to pick up after being seasonally weak in the third quarter.

Investors have always paid keen attention to Juniper’s growth, largely because of its focus on IP in the service provider market. The company is also a strong competitor of Cisco Systems Inc. (Nasdaq: CSCO), and its performance is often compared to Cisco’s IP router service provider business.

CEO Scott Kriens said during the conference call that there are challenges to growth, but he seemed upbeat about Juniper’s prospects. In particular, he talked about the potential consolidation of customers in the U.S. While Kriens believes that in the short term this could be disruptive for growth, he believes that over time it will have little impact on Juniper.

“Assets may change,” he said. “But there is no dispute that the underlying infrastructure will be IP. As Juniper gains market share, there’s more certainty of who will be delivering the answer.”

Siemens AG (NYSE: SI; Frankfurt: SIE) and LM Ericsson (Nasdaq: ERICY) were once again 10 percent customers. The company boosted it's cash position by $43 million; it ended the quarter with $767 million in cash and short-term investments.

— Marguerite Reardon, Senior Editor, Light Reading