Optical/IP Networks

Juniper Soars on Earnings Report

Juniper Networks Inc. (Nasdaq: JNPR) beat analyst expectations for the third quarter, sending its after-hours stock price soaring $3.76 (18.4%) to $20.40. In regular trading today, before earnings were announced, the stock closed at $16.65.

“It’s never been easier to separate the winners from the others,” said Juniper’s CEO Scott Kriens on the conference call. “The winners will be companies that continue to deliver new customers and grow profits.”

The routing company reported pro forma profits of $32.5 million, or 10 cents per share, excluding charges. This beat First Call estimates of $0.07 a share on revenue of $187.92. For the same quarter a year ago the company reported earnings of $60.3 million or 17 cents per share. Revenues for this quarter were $201.7 million, compared with $201.2 million a year ago.

The company also announced a two-year stock buyback program of up to $200 million. As for the future, Juniper said it expects earnings of 10 cents a share for Q4 2001 and 55 cents for the year. For 2002, the company expects revenues of $900 million to $1 billion or 40 to 45 cents a share.

The company also reported margins of 60.4 percent, in line with analyst expectations of roughly 60.5 percent, indicating that the pricing environment has remained stable.

A slew of new customers were added to the company’s roster this quarter. Many of them were in Europe and Asia, pushing the percentage of international sales up to 34 percent this quarter from 28 percent last quarter. Juniper also added several new customers in North America, including a deal it recently announced with Genuity Inc. (Nasdaq: GENU).

The largest contributors to revenue this quarter were Qwest Communications International Corp. (NYSE: Q) and WorldCom Inc. (Nasdaq: WCOM), which each made up better than ten percent of Juniper’s sales. Its reseller contract with Ericsson AB (Nasdaq: ERICY) also made up more than 10 percent of sales this quarter.

While a specific breakdown wasn’t given, Kriens said the company saw growth in both core routing and access, and he denied the notion that Juniper is a one-product company. He also said that a large portion of the Qwest revenues this quarter came from sales of its access boxes, which include the M5 and M10 router series.

But the company could face pressure from Cisco Systems Inc. (Nasdaq: CSCO), which has recently announced a batch of new 10-Gbit/s routers aimed at the network edge (see Cisco Storms the Metro Edge).

During the call, Kriens also addressed what he referred to as several misconceptions about Juniper and the industry as a whole. For one, he denied claims that the core router market is dead, as well as that the cuts in capital spending have adversely affected spending on IP products such as Juniper’s routers. He also denied the idea of a capacity glut in the core of the network.

“The service core will grow and will continue to need capacity,” he said. “There might be routers that aren’t running all ports to full capacity but there aren't routers sitting idly. It’s like saying that the on-ramp to the highway has congestion and the freeway is clear -- even if that were true, it won’t be for long.”

— Marguerite Reardon, Senior Editor, Light Reading
noitall 12/4/2012 | 7:44:13 PM
re: Juniper Soars on Earnings Report this is the shot in the arm we've all been waiting for. jnpr, lead the way!
dietaryfiber 12/4/2012 | 7:44:12 PM
re: Juniper Soars on Earnings Report Hunh?

For a company that had a huge stock price with 100% quarter over quarter growth.....now they are predicting a 25% growth.

At $0.45 a share, this gives JNPR a $12 stock price (on a PEG of 1). So before we all blow this thing out of proportion, remember JNPR's stock is now trading at 2x a reasonable value.

dietary fiber
reoptic 12/4/2012 | 7:44:09 PM
re: Juniper Soars on Earnings Report Stock has doubled in a week after competitors introduced new products and it lowered its '02 estimates...made big money from WCOM and Q but both are cutting back bigtime on spending next year and Juniper isn't going to make it up on their recent win in Poland...look out below.
RouteThis 12/4/2012 | 7:44:00 PM
re: Juniper Soars on Earnings Report Investor-posting Folks...

I realize from your I-gotta-maka-buck investor perspective (which I appreciate) that Juniper and other companies that get a quick boost in the midst of an industry turndown - it's a flash in the pan. Well, hey....buy it when it's at $9 and sell at $24 - you'll make a killing.

Those of us in the industry, however, are glad to see somebody (even one of our competitors) get a shot in the arm. We want this puppy (our industry) to turn around some day, and in the midst of seeing our friends and co-workers get ushered out the door I'll take some positive news - even if it's about Juniper.

I think the saddest thing about all of this is that our overpaid, underskilled management (I'm talking about pretty much every vendor here) has shown their true colors. (Cisco management has to this point, in my humble opinion, done the best job of the major vendors - time will tell.)

Some of them fincanced CLECs that went belly-up, while bungling mergers and aquisitions, while bungling product development and R&D, while becoming skilled at taking great engineering talent and seeing how useless they could make it, while not having a damn clue about any carrier spending turndown our pretty much anything else.

In the end even when we get rid of them like exiled monarchs - they get shown the golden parachute and a nice cushy place to land - we get escorted out to the parking lot by security like criminals.

Marconi management is a perfect example of this - The two men who are were most responsible for the present state of affairs over in merry old England - with their Lord and Sir titles (what a f**** joke) managed to get rich while whittling a company and its employees lives (and their families) down to nearly nada, zip - nothing. When they left it was "Sorry old boy, you botched the job, but we'll give you...eh...600,000 pounds and...eh...300,000 pounds just because you're such sporting chaps!") Some of my best buddies from the former FORE Systems aquisition(used to work there in 1999) have been "made redundant".

Relatively speaking though I'd say our industry CEO's/executives at least are not as bad as in the airline industry. I couldn't believe a news program I saw that stated the CEO of US Airways makes $12,000,000 a year!! That's i-n-s-a-n-e... no wonder they go cheap on the food they serv :)

Peace and here's hoping we do see some more positive signs/trends in the upcoming months. Right now it looks like the Metro Optical and Metro GigE companies are going to see the most growth for the forseeable future...
Belzebutt 12/4/2012 | 7:43:43 PM
re: Juniper Soars on Earnings Report What recent Juniper win in Poland are you talking about? They've had M160s at TPSA for a while, what's new?
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