Juniper raises its outlook for 2007

Juniper Networks raised its expectations for the year after reporting second-quarter earnings results Wednesday evening.

After having previously projected between $2.6 billion and $2.7 billion in 2007 revenue, the router vendor now expects between $2.73 billion and $2.76 billion. And it raised its annual earnings expectations from between $0.80 and $0.81 per share to between $0.82 and $0.83 per share.

The adjustment came after Juniper reported its second-quarter revenue had grown 6% sequentially and 17% from a year earlier to $665 million. The company’s service provider business did even better, with revenue up 18% from a year earlier. Revenue from services was up 25% from a year earlier to $123 million.

More than half of Juniper’s second-quarter service provider router revenue came from core routers, though the company doesn’t necessarily expect that to continue. Revenue from its T-series core routers grew in double digits sequentially. Revenue from its E320 doubled sequentially in the second quarter. And revenue from its MX960 Ethernet services router, which became available in the first quarter, exceeded $10 million.

Only 28% of Juniper’s second-quarter revenue came through direct sales, down slightly from the first quarter. And 18% of its revenue came from its partnership with Nokia Siemens Networks (NSN), while that from other partners such as Ericsson and Alcatel-Lucent was less than 10%. Though NSN’s contribution was much larger than usual, no particular event caused the spike, Juniper’s Chief Executive Officer Scott Kriens said. “[NSN’s] value proposition--more than just Juniper’s contribution--is well-received in the marketplace. As you see growth across the marketplace, you’ll see NSN and Juniper participate in that.”

Juniper’s enterprise business was again unprofitable in the second quarter, but the company said it was on track to reach profits by the end of this year.

During Wednesday’s conference call, Juniper’s chief operating officer for the last six months, Stephen Elop, outlined broad efforts to make the company more efficient and effective. As part of those efforts, he pledged to aim Juniper more directly at its target market--customers with high-performance network needs--pointing out that those customers may not always be the largest companies. He recounted a recent visit to a Fortune 500 company whose managers didn’t view networking as key to its strategy and contrasted that with a smaller, mid-sized retailer whose managers relied heavily on high-performance networks. Juniper would more aggressively pursue the latter, he said.