From Lightreading.com (with conference call notes):
OCTOBER 11, 2001
PREVIOUS NEWS ANALYSIS
Juniper Soars on Earnings Report
Juniper Networks Inc. (Nasdaq: JNPR - message board) 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 - message board).
The largest contributors to revenue this quarter were Qwest Communications International Corp. (NYSE: Q - message board) and WorldCom Inc. (Nasdaq: WCOM - message board), which each made up better than ten percent of Juniper s sales. Its reseller contract with Ericsson AB (Nasdaq: ERICY - message board) 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 - message board), 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
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