Juniper's Numbers: Mystery Solved?
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A possible explanation has emerged for a bit of a brouhaha that occurred today after Juniper Networks Inc. (Nasdaq: JNPR - message board) announced its second-quarter results (see Juniper Numbers Raise Questions ).
The commotion occurred because Juniper cited a lower-than-expected figure of $35 million for the second-quarter revenues of Unisphere, which it acquired on July 1. Prior to the acquisition, Unisphere had forecast that it would make at least $50 million -- which raised a question over what had happened to the difference, the $15 million.
Quite a few analysts told Light Reading that they suspected Juniper was playing games with its accounting -- that it wasn't going to recognize the extra $15 million until the third quarter, so that its next set of figures would look better than they really were.
Juniper responded to these allegations with a flat denial:
Juniper Networks' acquisition of Unisphere closed on July 1st 2002, which is Juniper's 3rd quarter. Juniper did not recognize or defer any Unisphere revenue as it relates to our second quarter results.
Translation: Since Unisphere was not part of Juniper until Q3, there is no way that it could have deferred any of Unisphere’s revenues.
One possible explanation is that Juniper didn't acquire the totality of Unisphere; it only bought its edge routing business. The other part, its softswitching business, was absorbed by Siemens AG (NYSE: SI - message board; Frankfurt: SIE) (see Why Siemens Sold Unisphere ).
In other words, it's possible that Unisphere's edge routing business generated $35 million in the second quarter, while its softswitching business (absorbed by Siemens) generated the mysterious $15 million. The remaining question is whether Unisphere's softswitches really generated that much revenue.
— Peter Heywood, Founding Editor, Light Reading
lightreading.com |
