Juniper Sees Q1 Stabilize
Specifically, in January, service providers and enterprises "spent a lot of their time just redoing budgets," putting off orders until late in the quarter, CEO Kevin Johnson said on today's conference call with analysts. "Things are becoming more stable" now that those customers have settled into more normal buying patterns.
But he added that the company still doesn't have a good idea of what business will look like beyond this quarter.
Juniper had announced two weeks ago that its revenues would be well short of the $800 million to $830 million it had predicted, a forecast Wall Street had thought ambitious in the first place. (See Juniper Cuts Q1 Forecast.)
For its first quarter, which ended March 31, Juniper reported losses of $4.5 million, or 1 cent per share, on revenues of $764.2 million. The previous quarter, Juniper had reported net income of $511.8 million, or 93 cents per share, on revenues of $923.5 million. (See Juniper Reports Q1.)
The losses were partly due to changes in California tax law, eating up 12 cents per share worth of profit according to generally accepted accounting principles (GAAP). Juniper's pro forma net income of 17 cents per share matched analyst expectations as measured by Reuters Research .
For its second quarter, Juniper is expecting revenues of about $764 million again, pretty close to the $770 million analysts have predicted so far. But the market is still unpredictable, so Juniper is saying revenues could land somewhere between $740 million and $780 million.
"We're beginning to see some signs of increased stability from our customers. However, conditions remain challenging," CFO Robyn Denholm said on the conference call.
The company is wading through the recession by cutting costs almost everywhere except R&D. Johnson keeps pledging that Juniper will spend more on R&D this year than it did last year. (See Juniper Tightens Its Belt.)
Juniper laid off 140 people during the first quarter, but it also hired in R&D and customer service -- the net result being 39 positions removed. Juniper took a $4.2 million charge related to the layoffs, and about 140 more layoffs are planned for later in the year, CFO Robyn Denholm said. (Juniper had 7,014 full-time employees as of Dec. 31, according to its Securities and Exchange Commission (SEC) filings.)
Overall, Juniper's revenues were down 7 percent from the $822.9 million reported a year ago. That's largely due to the service provider segment, which saw revenues drop 14 percent from the first quarter a year ago.
Enterprise business actually grew 13 percent compared with a year ago, even though enterprise customers, like service providers, didn't do much spending in January 2009. It's a reflection of the fact that Juniper's enterprise business is still relatively new.
Another bright spot: Revenues from the Asia/Pacific region grew during the first quarter -- compared with the previous quarter and with last year's first quarter.
Juniper shares were up $1.24 (6.4%) at $20.50 in after-hours trading.
— Craig Matsumoto, West Coast Editor, Light Reading