Juniper Networks Profit Matches Estimates as Revenue Rises
October 18, 2011, 5:57 PM EDTBy Danielle Kucera
(Updates with analyst comment in the fourth paragraph.)
Oct. 18 (Bloomberg) -- Juniper Networks Inc., the second- largest maker of computer-networking equipment, reported sales and profit that met estimates after new products attracted customers.
Third-quarter profit excluding some costs was 28 cents a share, the Sunnyvale, California-based company said in a statement, matching the average projected by analysts surveyed by Bloomberg. Revenue rose 9 percent to $1.1 billion, according to the statement.
Juniper has introduced products for business customers moving to cloud computing, which delivers their software and data over the Web. Competing with larger rival Cisco Systems Inc., Juniper introduced the first product in that family, QFabric, in February after pouring more than $100 million into the suite over three years.
“They’ve got a really good product cycle in 2012,” Brian Marshall, an analyst at ISI Group, said in a telephone interview. “There’s a little bit of a relief rally in the after-market. This one has been taken back behind the woodshed a little bit too much.”
Juniper shares rose as much as 5.9 percent to $22.67 in after-hours trading. The stock had climbed 5 percent to $21.41 at the close in New York, showing a drop of 42 percent this year.
Net Income Drop
Net income attributable to the company fell 38 percent to $83.7 million from the year-earlier quarter, dragged down by higher marketing costs for the new product line. Sales and marketing expense rose 25 percent to $254.9 million from $204.7 million a year earlier.
Juniper has been “prudently” investing in sales and marketing, Kevin Johnson, chief executive officer of the company, said on a conference call following the statement.
“We’re poised to begin delivering revenue from our innovation road map next year,” Johnson said. “We’ve met milestones in shipment schedules in our new products.”
Fourth-quarter revenue will be $1.16 billion to $1.22 billion, Juniper said. Profit excluding some items will be 32 cents to 36 cents a share. Analysts projected $1.24 billion in sales and 37 cents in profit.
Companies buy Juniper’s switches for their computer networks, while phone and Internet-service providers led by Verizon Communications Inc. and AT&T Inc. typically purchase its more expensive routers.
About 70 percent of Juniper’s revenue comes from such companies, said Brian Modoff, an analyst at Deutsche Bank Securities Inc. in San Francisco.
Before this quarter, the company had been grappling with slower-than-expected spending by some customers, including service providers led by AT&T.
--Editors: Donna Alvarado, John Lear
To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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