Advertisment

Juniper Q1 profit in line, sees weak Q2

author-image
CIOL Bureau
New Update

CALIFORNIA, USA: Network equipment maker Juniper Networks Inc posted quarterly results in line with market expectations, but forecast a lower-than-expected second-quarter profit as it sees some uncertainty related to the Japan earthquake.

Advertisment

There would be some risk to revenue in Japan over the next couple of quarters, Chief Financial Officer Robyn Denholm said on a conference call, adding she expected a "significant pause" in the Japan business in the second quarter.

Juniper, which gets about 5-8 per cent of its revenue from Japan, forecast an adjusted profit of 31-34 cents per share for the second quarter.

"Due to the timing of the earthquake in Japan there was only a small disruption to our business in the first quarter, as many of the orders were fulfilled prior to March 11," Denholm said.

Advertisment

Forecasts Q2 revenue of $1.13-$1.18 billion

The Sunnyvale, California-based company, which counts AT&T Inc , Verizon Communications and Japan's NTT DoCoMo Inc as its customers, forecast second-quarter revenue of $1.13-$1.18 billion.

Analysts, on average, were expecting earnings of 36 cents a share, on revenue of $1.16 billion, according to Thomson Reuters I/B/E/S.

Advertisment

"The numbers were very good amidst what was a very challenging macro backdrop," Mizuho Securities analyst Joanna Makris said.

"Investors are likely to look past the Japan issue" and look into the concerns regarding some of its products, Makris said.

Juniper's ethernet switching line experienced a pause in the first quarter as customers waited for a new product, it said.

Advertisment

The company expects its second-quarter adjusted gross margin to remain within its targeted range of 66-68 per cent.

"They are entering into a very competitive market with ethernet and we have seen other companies comment about erosion of gross margins associated with the ethernet business," Makris said.

The tepid results from Juniper come even as smaller rival Riverbed Technology posted first-quarter results that topped Wall Street estimates and forecast a strong second-quarter profit.

Advertisment

In February, larger rival Cisco systems Inc warned of dwindling public spending and weaker margins from tough competition.

Juniper posted January-March net income of $129.8 million, or 24 cents a share.

Excluding items, it earned 32 cents a share, in line with what analysts had expected.

Shares of the company closed at $38.47 on Tuesday on the New York Stock Exchange.

tech-news