Juniper Networks Inc. (NYSE: JNPR) finished 2006 on a strong note, and company officials are expecting further growth this year.

But it's not just the vendor's sales that are set to grow in 2007, as Juniper says it will spend more money as well.

For the quarter ended Dec. 31, Juniper reported revenues of $595.8 million, compared with $573.6 million the previous quarter and $575.5 million a year earlier. (See Juniper Reports Q4.)

Analysts were expecting Juniper to report $592.9 million in revenues, according to Reuters Research .

Revenues for the first three months of 2007 should be between $615 million and $625 million, said the IP router vendor, a range notably higher than the analyst consensus of $603.9 million.

For the full year 2007, Juniper expects revenues of $2.6 billion to $2.7 billion, up from $2.3 billion in 2006.

But as revenues grow, so will costs. Juniper has been increasing its sales force and its R&D budget, and expenses will continue to grow alongside revenues throughout this year, CFO Robert Dykes said during Tuesday afternoon's quarterly conference call. That, he said, should keep operating margins steady at around 20 percent.

"We have a tremendous opportunity to invest in this business and gain market share on both the service provider and the enterprise side," Dykes said.

Investors, though, weren't so positive about the spending plans. Juniper's stock sagged $1.19, about 6 percent, to $18.63 in after-hours trading.

Juniper isn't reporting full net income data, as the company is still restating earnings due to its ongoing stock options probe. (See Juniper Readies Restatements.)

But Dykes said fourth-quarter pro forma earnings would have been "in line" with the 19 cents per share that Juniper had predicted.

As for those restatements, Dykes said they should be filed by the end of March. Juniper has already said it's looking at $900 million in non-cash charges related to options granted between 1999 and 2003. (See Juniper Completes Probe.)

The call had an air of confidence that contrasts with the "oops" factor of its July earnings. That's when Juniper announced its stock options problems and a goodwill writeoff, not to mention an arguably disappointing forecast. (See Juniper Dusts Off Its Eraser.) Elsewhere on the call, CEO Scott Kriens reflected on the NetScreen acquisition, now approaching its third birthday. The success Juniper had originally predicted has "taken longer than we would all have liked," but Kriens contended Juniper's reasons for the deal have proven to be "increasingly correct." Still, he indicated Juniper has a lot of work ahead on this front. (See Juniper Buys NetScreen.)

Separately, Juniper said it's expecting to receive $40 million in deferred Verizon Communications Inc. (NYSE: VZ) revenues during the first half of 2007. That money got held up a few quarters ago for reasons Juniper never fully explained. (See Juniper Defends Core Business in Q1.)

— Craig Matsumoto, West Coast Editor, Light Reading