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Optical/IP

Juniper Sails Through Q1

As CEO Scott Kriens predicted, Juniper Networks Inc. (NYSE: JNPR) still isn't seeing problems from the U.S. economy, as the company reported good first-quarter earnings and watched some of its new products start shipping.

Juniper isn't showing the effects of recession that some companies, including Cisco Systems Inc. (Nasdaq: CSCO) and Foundry Networks Inc. (Nasdaq: FDRY), have reported. Then again, Kriens has repeatedly said Juniper wouldn't be the kind of company to see early effects of an economic downturn. (See Cisco Sounds Warning Bells and Q1 Thrill Ride.)

Juniper did see some weakness in North American enterprise business, particularly in U.S. government clients, while enterprise sales in Europe and Asia remained strong. But Kriens noted that enterprise sales usually dip during the first quarter, and he said Juniper's numbers revealed "nothing unusual compared with previous quarters in a new calendar year."

The result was that Juniper's security division saw revenues drop 9 percent from the fourth quarter, while routers and switches were up 6 percent.

Juniper did spring a good-news surprise, noting that it's started shipments of routers to NTT Group (NYSE: NTT) for its next-generation network. Back in 2006, Juniper had talked about a stall in Japan's next-generation network plans. (See Juniper Disappoints in Q4.)

"Obviously, we're pleased," Kriens said on a conference call with analysts. "But we also expect these deployments will occur in a manner consistent with other NGN deployments around the world," meaning sales will be spread across multiple years, with "no significant impact in any particular quarter."

For its first quarter, which ended March 31, Juniper reported revenues of $822.9 million and net income of $110.4 million, or 20 cents per diluted share. In the previous quarter, Juniper had reported revenues of $809.2 million and net income of $122.9 million, or 22 cents per share.

For its first quarter a year ago, Juniper reported revenues of $626.9 million and net income of $66.7 million, or 11 cents per share.

Juniper's non-GAAP earnings of 27 cents per share beat analysts' estimates by two cents, according to Reuters Research .

The March quarter was the first full quarter of shipments for Juniper's T1600, and Juniper says it's shipped 77 of the core routers and has 105 more booked.

The result "compares quite favorably to results touted by our competitor," a nod to Cisco's claim of around 100 shipments after the CRS-1's first year of testing with customers.



Juniper also began shipping its EX3200 and EX4200 Ethernet switches, as planned. (See Juniper Storms Into Ethernet Switching.)

For its second-quarter, Juniper is predicting revenues of $845 million to $855 million, perhaps a bit conservative, considering analysts polled by Reuters were expecting $853 million.

Juniper shares were up 28 cents (1.1%) at $26.01 in early after-hours trading, before Kriens had issued Juniper's second-quarter forecast.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:42:31 PM
re: Juniper Sails Through Q1 * Juniper stock is now up 3-4% after-hours.

* Service Layer Technologies (SLT; the Netscreen segment) would have reported a $5 million operating loss if Juniper was reporting just products. (Juniper combines products & services for the SLT and IPG (router) sides now.) Juniper insists you shouldn't extrapolate and assume SLT will lose money again in Q2.

* As you might expect, the NTT thing actually started up earlier, but Juniper didn't get permission to announce it til now. NTT buildout is starting at the core, so sales there are mostly the T-series; Kriens wouldn't give any details on how much that means T1600 vs. T640. Since they're the same chassis, he suggested it doesn't matter much.
mr zippy 12/5/2012 | 3:42:28 PM
re: Juniper Sails Through Q1 Generally, I'd have thought for NTT to be the initial reference customer for Cisco's ASR1000 Cisco would want the customer's network to be all Cisco.
desiEngineer 12/5/2012 | 3:42:25 PM
re: Juniper Sails Through Q1 What about Juniper is down 3-4% during regular trading today? Is there something to be read in that the rally was somewhat restricted to after-hours speculation?

-desi
Pete Baldwin 12/5/2012 | 3:42:22 PM
re: Juniper Sails Through Q1 Nothing that I can think of. Cisco is down 3% and Nasdaq in general down 1%+ (Juniper's only down 1.8% at this particular instant) ... so i would guess it's just normal fluctuations, or part of some bigger trend today.

(WARNING: Using my posts as investment advice is a lot like letting your dog pick chess moves.)
brahmos 12/5/2012 | 3:42:21 PM
re: Juniper Sails Through Q1 there is a difference in culture and capability between SLT and their main router bu. netscreen does
get some noteable sales but the rest doesnt seem to be going anywhere.
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