By Ben Fox Rubin
Juniper Networks Inc.'s (JNPR) second-quarter income fell 50% as
soft router and other hardware sales kept challenging the company's
results.
However, results beat the company's estimates, helping drive
shares up by 4.3% to $15.45 after hours. As of Tuesday's close, the
stock was down 27% so far this year.
For the third quarter, Juniper forecast a downbeat adjusted
profit of 15 cents to 18 cents a share on $1.04 billion to $1.08
billion in revenue. Analysts surveyed by Thomson Reuters expected
income of 21 cents a share and revenue of $1.11 billion.
The company also disclosed a new technology partnership with
Riverbed Technology Inc. (RVBD) involving wide area network
optimization, application delivery and other areas. Under the
agreement Juniper will license Riverbed's application-delivery
controller technology for about $75 million. The companies also
will begin a joint effort to integrate Riverbed's Steelhead mobile
technology into Juniper's Junos Pulse client.
Juniper's earnings have declined for more than a year amid soft
demand from several key customer groups. Like many of its peers,
the maker of routers and switches has faced headwinds as some
telecommunications companies--which typically account for more than
half of its revenue--reduce their capital expenditures in response
to economic uncertainty.
The company also faces stiff competition, including from larger
rival Cisco Systems Inc. (CSCO) and discounter Huawei Technologies
Co., but is optimistic a handful of recently launched products will
spur demand.
In the latest quarter, Juniper posted a profit of $57.7 million,
or 11 cents a share, down from $115.6 million, or 21 cents a share,
a year earlier. Excluding stock-based compensation, restructuring
impacts and other adjustments, per-share earnings fell to 19 cents
from 31 cents a share. Revenue dropped 4.2% to $1.07 billion.
The company's downbeat guidance in April called for a profit
between 15 cents and 17 cents a share with $1.03 billion to $1.06
billion in revenue.
Gross margin narrowed to 62.2% from 64.4%.
Revenue from Juniper's platform systems division fell 5% on
weaker sales of routing and security products. Revenue slipped 0.7%
in the smaller software solutions division.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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