Juniper’s First-Quarter Profit Meets Analysts’ Estimates
Juniper Networks Inc. (JNPR), the second- largest maker of Internet networking equipment, reported first- quarter profit that matched analysts’ estimates, a sign that carriers are still spending to support surging Web use.
Revenue rose 21 percent to $1.1 billion from $912.6 million in the year-earlier quarter, the Sunnyvale, California-based company said today in a statement. Profit excluding some items was 32 cents a share, matching analysts’ estimates.
Juniper is benefiting from Internet and telecommunications service providers buying network gear to handle the flood of data on smartphones and on computers running bandwidth-hungry videos. Concern that spending from one of Juniper’s biggest customers, AT&T Inc. (T), might decline did not materialize, said Joanna Makris, an analyst at Mizuho Securities USA in New York.
“There’s nothing to be concerned about here,” said Makris, an analyst at Mizuho Securities USA in New York. “There was a concern about AT&T and Verizon cutting back on spending. Nothing has changed in terms of their competitive strategy.”
Revenue in the current quarter will be $1.13 billion to $1.18 billion, Juniper said in the statement. Profit excluding some items will be as much as 34 cents a share. Analysts surveyed by Bloomberg expected $1.16 billion in sales and 36 cents a share of profit.
Juniper rose $1.18, or 3.1 percent, in late trading on the York Stock Exchange composite trading after closing up 21 cents to $38.47 at 4 p.m. The stock has climbed 23 percent in the last 12 months.
Juniper forecast second-quarter profit of 31 cents to 34 cents a share, missing the 36 cents estimated by analysts surveyed by Bloomberg.
Since joining Juniper in 2008, Chief Executive Officer Kevin Johnson has expanded the company’s capabilities by introducing security and data-center products and going after larger rival Cisco Systems Inc. (CSCO)
Juniper gets most of its revenue from service providers that buy routers to direct the flow of cell-phone text messages, voice and data over their networks. The company is now pursuing growth by going after the large businesses that have traditionally bought switches from Cisco to manage data centers.
The company is continuing to “play offense” as it tries to gain ground on competitors, Johnson said in an interview.
“Our performance in the first quarter is consistent with our long-term financial goals,” Johnson said. “We’re on target to meet or exceed those goals.”
Juniper introduced the first product in a new family of data-center gear in February, heightening its rivalry with San Jose, California-based Cisco. The company poured more than $100 million into the QFabric suite of products it spent three years developing.
Companies buy Juniper’s switches for their networks, while phone and Internet-service providers such as Verizon Communications Inc. (VZ) and AT&T typically purchase its more expensive routers. About 70 percent of Juniper’s business is from carriers, according to Sandeep Shyamsukha, an analyst at Auriga USA LLC in San Francisco.
At the same time, Juniper faces a slower pace of corporate spending on technology than in 2010 and steeper competition from networking companies in China, including ZTE Corp. (000063) and Huawei Technologies Co., and Paris-based Alcatel-Lucent SA.
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