(Adds outlook, analyst and CEO comments, byline)
By Ritsuko Ando
NEW YORK, April 24 (Reuters) - 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 earlier.
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 Web services.
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 Cisco’s CRS-1.
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 2007.
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)