Juniper shares up on robust quarter

Router maker Juniper beat analysts’ projections for the fourth quarter and raised financial estimates for 2001, giving communications equipment contributing to the good mood of investors early in this earnings season. Juniper shares reacted positively, jumping almost 10% in afternoon trading today to more than $140 per share.

The upstart competitor to Cisco Systems in the Internet router market reported pro forma net income, which excludes amortization of goodwill, deferred compensation and in-process R&D, of $84.6 million, or 24¢ a share. That compared with $60.3 million, or 17¢ a share in the year earlier quarter. Analysts polled by First Call/Thomson Financial predicted a profit of 18¢ a share. Including amortization of goodwill and other purchased intangibles, Juniper earned $62.2 million, or 18¢ a share.

Juniper’s revenues climbed more than fivefold from 1999’s comparable quarter to $295.4 million. For all of 2000, Juniper reported net revenues of $673.5 million and pro forma net income of $184 million, or 53¢ per share.

According to Chairman and CEO Scott Kriens, during the year Juniper diversified its customer base and saw revenue from all five its products, from the M5 to the M160. Only two customers-Ericsson and WorldCom-accounted for more than 10% of revenues in the fourth quarter. Kriens sees Juniper’s joint venture with Ericsson as being a key part of its strategy for gaining acceptance in the mobile IP market.

Based on the strong results and its view that fundamental demand is strong as ever, Juniper raised revenue growth estimates to 12% to 15% for the first quarter of 2001, up from 10%. For the year, Juniper now expects revenue of $1.5 billion-$1.6 billion, compared with the $1.3 billion-$1.4 billion range it projected earlier.

At the same time, however, Juniper warned that its revenue could be “lumpy” going forward and that the industry was facing an environment of reduced visibility into growth. “There is a growing concern regarding the market appetite in the short term and others have already registered the impact of this concern,” Kriens said. “It’s unclear if this is really a slowdown or just a self-inflicted pause. Juniper is not immune. Our visibility is reduced as well.”

Juniper shipped 1,378 units and 20,100 ports in the fourth quarter, according to Marcel Gani, Juniper’s chief financial officer. “We continue to see a trend towards the importance of our higher-speed interfaces in the market as well as an increase in total ports shipped as a result of our growing access product portfolio,” Kriens said.

The company added 229 employees in the quarter, ending the year with a headcount of 927, and expects to double its workforce this year. The quarterly number was the largest headcount addition in any given quarter since the company’s inception, Gani said.