Juniper provides good news

While most of the telecom sector endures financial slings and arrows, IP infrastructure systems provider Juniper Networks reported a first-quarter explosion, as revenues increased 420% from the same period last year.

For the three-month period ending March 31, the company posted revenues excluding special charges of $332.1 million compared to $63.9 million for the same period last year. Pro forma net income was $85.4 million, or 25 cents per diluted share, compared to $10.5 million, or 3 cents per diluted share one year ago.

The company’s results were in line with Wall Street’s consensus forecast of 25 cents per share, according to Thompson Financial/First Call.

“Our quarter-over-quarter revenue of over 12% in addition to the year-over-year revenue growth of over 400% reflects Juniper’s growing acceptance in the new IP infrastructure market and, more importantly, the new industry we’re committed to build the company to serve,” said Scott Kriens, chairman and CEO at Juniper in a conference call.

Though impressive, the 420% annual revenue increase is not as significant as Juniper’s 12% sequential growth quarter to quarter, said Sam Wilson, an analyst at Merrill Lynch.

“The key factor is that they kept growing even as the industry turned down,” Wilson said. “I’m a firm believer there are three things to a successful business: products, operations, and timing, and they’ve got all three.”

Wilson said the company positioned its product early on to lag behind network buildout. The aggressive network expansion of the past few years set the stage for Juniper to supply core routers to fiber-optic companies.

“When they were a small company, they put the infrastructure in place to be a big company,” Wilson said. “That’s what allowed them to book and ship like mad when the time came.”

In his call to investors, Kriens noted the importance of making correct assumptions in business to achieve positive results.

“This has got to be one of the best management teams I’ve ever seen,” Wilson said. “All they’ve done is build great products and focused on ruthless execution. These guys are a best-in-breed product and, when the dust clears, you’re going to find they’re still standing and doing better than before.”

In mid-day Nasdaq trading, Juniper shares rose 17% from yesterday’s close, up from $42.76 to $50.04.