Juniper's Revenues Rocket

No one doubted that Juniper Networks Inc. would do well in the second quarter of 2000.

But hitting revenues of $113 million exceeds all expectations. It's 77 percent up on the previous quarter, six times higher than a year ago, and 40 percent to 50 percent above estimates.

Net income is equally impressive - $0.08 per share excluding one-time items, compared to $0.03 per share in the first quarter of 2000. It's also double the $0.04 per share consensus estimate.

Where is all this growth coming from? Mostly from routers fitted with OC-12 and OC-48 interfaces according to Scott Kriens, Juniper's CEO . Juniper's early development of OC-192 interfaces will pay off in the long run, Kriens added. That's because carriers are testing and certifying them now, which will put Juniper ahead of the competition when demand takes off toward the end of 2000.

This was also the first quarter to recognize revenue from the new M160 router platform. Although Juniper didn't have hard numbers on the break down of sales among its three different routing platforms, Kriens said that there was a decline in the sale of Juniper's flagship M40 router and that the majority of sales came from the M20 edge router and the M160 core router.

"When customers see the growth potential and scale of the M160," said Kriens, "they look at cost difference between that and the M40 and they say they would rather have M160."

As might be expected, Kriens dodged questions about Juniper buying an optical startup, which is rumored to be on the cards. "One of benefits of Juniper's strategy is that it is interoperable with optical technology," he said. "We believe there are natural boundaries that should be respected. [And] we will practice a market position with respect to those boundaries."

Although Juniper's results exceeded expectations, they didn't have much impact on Wall Street today. Trading on Juniper opened 11 points higher this morning than yesterday's 169.50 close, but has dropped down a few points throughout the day.

by Marguerite Reardon, senior editor, Light Reading,http://www.lightreading.com
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