Juniper's Surge in Profits Not Enough to Meet Lofty Expectations

Juniper Networks reported after the bell Tuesday, posting a 46% jump in profits, but falling short of expectations. The company's net income came in at $85.1 million ($0.15/share) after reporting $58.3 million ($0.10/share) last year. Excluding certain items, the company earned $0.22/share, beating analysts' expectations by a penny. Revenue jumped to $735 million from $573.6 million, also surpassing expectations of $707.8 million. Despite beating estimates, it seemed the market wanted more from the company, whose shares fell 6.5% in after-hours trading to $34.71, following a 3.5% gain in the day session. "They beat by just a penny, but they should have beat by two pennies or three pennies," said Ehud Gelblum, an analyst at JPMorgan. Investors were looking for even more growth from Juniper, who has seen an increase in demand for greater network capacity spur higher sales (full earnings call transcript). Juniper is the second largest Internet router producer in the world, controlling 15% of the market; Cisco has a grasp on 65% of the market.

Sources: Press release, Reuters, Bloomberg
Commentary: Juniper Ripe for a Sell - Barron's • Online Video Beneficiaries: Cisco
Stocks to watch: JNPR, CSCO. ETFs: ROM, IAH
Earnings call transcript: Juniper Networks Q3 2007

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