(Adds outlook, analyst and CEO comments, byline)
By Ritsuko Ando
NEW YORK, April 24 Juniper Networks Inc
JNPR.O reported stronger-than-expected quarterly results on
Thursday on growing demand for advanced telecommunications
networks, even amid the weaker U.S. economy.
The company, which competes with Cisco Systems Inc (CSCO.O)
in making routers that direct Internet traffic, also said it
was gaining market share and nudged up its full-year profit
outlook. Its shares rose 3 percent in after-hours trading.
Chief Executive Scott Kriens said he saw "no evidence of a
weakening demand environment" among U.S. service providers, or
phone and cable companies that are key clients. He said a
slight weakness in Juniper's U.S. enterprise business was
largely due to a slowdown in government orders.
"From a market share perspective, Juniper continued to gain
market share in every major product category," he said.
Juniper said its first-quarter revenue rose 31 percent to
$822.9 million, higher than the average analyst forecast of
$815.3 million, according to Reuters Estimates.
Net income rose 66 percent to $110.4 million, or 20 cents
per share, from $66.65 million, or 11 cents a share, a year
Profit excluding items rose to 27 cents a share from 19
cents, higher than Wall Street's forecast of 25 cents.
"I felt encouraged, especially in a challenging quarter ...
They managed to perform better. I think they have a very strong
product portfolio," said Signal Hill analyst Erik Suppiger,
rating the shares a "buy".
Juniper forecast full-year adjusted earnings per share in a
range of $1.10 to $1.13. It had previously forecast $1.08 to
$1.13 per share.
Analysts also noted Juniper's improving operating margin,
which rose to 17.3 percent from 9.6 percent a year ago.
Juniper, along with Cisco, Alcatel-Lucent (ALUA.PA) and
Nortel Networks Corp NT.TO, has benefited from growth in
online video and other Internet uses that require high-speed
Many of Juniper's rivals offer a broader range of products,
often selling them as bundles.
Juniper has said it aims to grow by focusing on
high-performance equipment. Instead of broadening its product
line, it has launched a variety of advanced network gear
including a new core router called the T1600 that competes with
Worries about growing competition as well as the effects of
a slower economy have dragged Juniper shares down around 20
percent since the start of the year, after a 75 percent rise in
Kriens said a weaker economy may make its focus on
high-performance even more rewarding.
"The way that translates in our market is that in times of
uncertainty, business leaders are making more carefully
considered purchase decisions than ever before, because each
dollar spent is studied," he said.
For the second quarter, he forecast adjusted earnings of 26
cents to 27 cents on revenue of $845 million to $855 million.
Analysts expected adjusted earnings of 27 cents on revenue
of $853 million for the second quarter.
Kriens also announced that the company had won orders from
Japan's dominant phone carrier NTT Corp (9432.T) to help build
out its next-generation network. Cisco has also said it would
take part in the NTT project.
He did not elaborate on details of the NTT project, but
said it would be involve Juniper's core routing equipment and
likely take more than a year.
(Editing by Carol Bishopric)