JNPR ( 15.50-->$21.50 zoom zoom)PE 70 Beats Street; Stock Jumps
By Peter Henderson
SAN FRANCISCO (Reuters) - Juniper Networks Inc. (Nasdaq:JNPR - news) on Thursday reported that third-quarter results were steady on three months earlier, surprising Wall Street and encouraging analysts that the worst might be behind the sector whose equipment is at the heart of the Internet.
Excluding one-time charges, the relatively tiny competitor to Cisco Systems Inc.(Nasdaq:CSCO - news) posted a profit of $32.5 million, or 10 cents per share.
That was a drop of 46 percent from the year-ago quarter, when Sunnyvale, California-based Juniper earned $60.3 million, or 17 cents per share.
Revenues for the quarter were $201.7 million compared with $201.2 million a year ago.
The results were about the same as three months earlier, when Juniper reported earnings per share of 9 cents on sales of $202.2 million, and the company forecast fourth quarter results would mirror the third.
Shares jumped in after hours trade to $21.72 on Instinet from a close of $16.64 on the Nasdaq, where the stock had already gained 11 percent for the day.
AVOIDED FALLING OFF CLIFF
``It seems like a very solid quarter in an environment where a month ago everybody thought these guys were falling off a cliff,'' said SoundView Technology analyst Ilya Grozovsky.
``Nobody else will be flat sequentially,'' said Robertson Stephens network equipment analyst Paul Johnson, who initially had expected the Sept. 11 hijacking attacks to disrupt business and credited Juniper's management's focus for the results.
Juniper said the attacks had not hurt business, and Johnson was positive for the entire sector.
``I think the stocks are going to do better, because everyone is going to realize it is not a disaster, and maybe the worst is behind us. But Juniper is probably the best managed business out there.''
Most analysts polled by research firm Thomson Financial/First Call predicted the company would post third-quarter earnings in a range of 5 cents to 9 cents per share. The consensus view was for earnings of 7 cents per share on revenue of $187.92 million.
Juniper reported a slew of extraordinary charges, including a charge to contract manufacturers of $39.9 million, resulting in an overall net loss of $29.7 million or 9 cents per share for the quarter, compared with net income of $58.1 million or 17 cents per share in the third quarter of 2000.
The company also announced a two-year stock buyback program worth up to $200 million.
``We are large enough to weather storm, and yet we are agile enough to navigate around the worst of it,'' Chairman and Chief Executive Scott Kriens said in a conference call.
In a telephone interview he said that network builders had to innovate and that demand for infrastructure products would be less depressed than other areas.
``We are in a technology driven market,'' he said.
``We don't think this should be interpreted as a generally rising tide,'' he added, comparing the environment to the go-go days about a year ago. ``I think there are still going to be winners and losers.''
Chief Financial Officer Marcel Gani said the future was still cloudy but forecast fourth quarter sales flat on those in the third and pro forma earnings per share of 10 cents.
Next year sales would be $900 million to $1 billion and earnings per share 40-45 cents, he said.
Juniper stock has underperformed bigger rival Cisco Systems Inc. (CSCO.O) by about 70 percent this year, although both are down by more than half.
Both also have perked up since Oct. 4, when Cisco reaffirmed the company's outlook for the fiscal quarter ending Oct. 31.
Networking companies were hard hit after major customers such as telecommunications firms found themselves with more capacity than needed, helping to propel the economy into the current slowdown. |
