Juniper Continues Positive Earnings Streak

Juniper Networks, which makes large routers for Internet infrastructure use, reported positive earnings for its most-recent financial quarter, with revenues increasing 43 percent from a like period in 2003.

For the period ending March 31, 2004, Juniper said it had net revenues of $224.1 million, up from $157.2 million for the same quarter a year ago and up 8 percent from the fourth quarter of 2003. The company's GAAP net income for its first fiscal quarter of 2004 was 8 cents per share, hitting the number predicted by Wall Street analysts before Wednesday's earnings announcement.

Juniper said that NetScreen Technologies, the security products company Juniper said it would acquire earlier this year, had revenues of $93.5 million for the first quarter, up from $58.3 million for the same period in 2003. NetScreen's GAAP net loss for the quarter was 3 cents per share, compared to a loss of 7 cents per share for the like period a year ago.

Since the NetScreen acquisition did not close until April 16, its financial results will not be combined with Juniper's until the next fiscal quarter, Juniper said.

"Our first quarter was strong, and the outlook going forward is that Juniper is positioned exactly where the industry needs to go," said Scott Kriens, Juniper's CEO, in a conference call Wednesday afternoon. Juniper said strong sales in the government market, as well as strong sales through Ericsson and Siemens, which resell Juniper equipment, helped contribute to the quarter's success.In a bit of a management twist, Kriens said that former NetScreen CEO Robert Thomas will be leaving the company after a yet-undetermined transition period. Kittu Kolluri, former CEO of VPN provider Neoteris (which NetScreen acquired last year), will lead the former NetScreen businesses as vice president and general manager of Juniper's security division, Kriens said. Kriens said approximately 100 employees were fired as a result of "redundancies" between NetScreen and Juniper positions.

Though Juniper said it expects strong sales to continue throughout the rest of the year, the market reacted negatively in after-hours trading, with Juniper shares losing almost $1.90 in the first hour after the announcement. Juniper shares had increased by 92 cents to close at $25.83 on Wednesday.

Kriens used the end of the call to do a little cheerleading, taking a swipe at main competitor Cisco Systems in the process.

"There was a lot said about our motivation [for acquiring NetScreen]," Kriens said, claiming that some had called it a purchase addressing a weakness in the company's product portfolio. "This is an acquisition that joins strength with strength," Kriens said. "The time to expand is when a company is strong, and the market is ready for new leadership. That time is now."

Kriens also said Juniper made some headway on its Infranet initiative during the past quarter, holding the first formative meeting of the company's planned Internet architecture-reform coalition. The Infranet group, led by Juniper, now has its own Web site, and has planned its first council meeting, at the Supercomm show in Chicago in June.0