Juniper Networks Inc. ( JNPR ) posted adjusted
earnings per share (EPS) of 20 cents in the first quarter of 2013,
surpassing the Zacks Consensus Estimate of 15 cents.
Juniper's first-quarter 2013 revenues inched up 2.6% to $1.06
billion from the year-ago quarter. Revenues were down 7%
sequentially. The sequential decline in revenues can be attributed
to lower business compared to the previous quarter. Contribution
from the American Service Providers was strong. Moreover, Juniper
has witnessed good business from AT&T ( T ) and
Verizon ( VZ ) both contributing
about 10.0% of the company's total revenue.
Juniper generated 73.8% of its consolidated quarterly revenue
from product sales, which dropped 1.3% from the year-ago quarter.
The remaining 26.2% came from service revenues, which grew 6.5% on
a year-over-year basis.
Revenue by Region
As per geographic segments, the Americas contributed around
55.9%, Europe, the Middle East and America (EMEA) generated 27.4%
and Asia-Pacific (APAC) provided 16.7% to total revenue. On a
year-over-year basis, revenues from the Americas were up 11.4%,
reflecting Service Provider growth.
EMEA revenues were down 5.4% year over year. The decline can be
attributed to lower Enterprise revenues. Further, sluggish business
in Eastern Europe drove the downside. The company is facing
challenge in the region.
On a GAAP basis, Juniper Networks' gross margin was 63.3% in the
first quarter versus 61.4% in the year-ago quarter.
Operating margin was 8.2% versus 4.6% in the year-ago quarter.
Operating expenses declined to $87.0 million, driven by lower
research & development expense and sales & marketing
Net income was $91.0 million compared with $16.3 million in the
prior-year quarter. Excluding special items such as restructuring
charges, amortization, acquisition-related charges, non-recurring
income tax adjustments, but including stock-based compensation
expenses, non-GAAP adjusted net income in the quarter was $101.5
million or 20 cents per share versus $34.7 million or 6 cents in
the year-ago quarter.
Balance Sheet & Cash Flow
Total cash, cash equivalents and investments in the reported
quarter were $2.66 billion compared with $2.85 billion in the
previous quarter. Long-term debt was $999.2 million, roughly flat
sequentially. Cash used in operations is $8.9 million, down
sequentially from cash flow of $155.0 million. DSO for the company
was at 45 days in the quarter, up from 35 days in the last quarter,
due to constant shipment.
Second-Quarter 2013 Guidance
Juniper expects second-quarter revenues in the range of
$1,070-$1,100 million, with non-GAAP gross margin in the
range of 64%-65%. The company expects non-GAAP operating expenses
to be $510 million, plus or minus $5.0 million, whereas the
non-GAAP operating margin will likely be 17.5%. Moreover, the
non-GAAP earnings per share will range between 22 cents and 26
Juniper is a leading provider of networking devices and
technology. The company delivered decent first-quarter 2013
results, beating the Zacks Consensus Estimate on the bottom line.
However, year-over-year comparisons were not too encouraging. Cash
position is also a reason for concern and the company experienced
negative operating cash flow, while the debt level remains
The company is trying to add new products to its portfolio,
focus on revenue growth as well as cost reduction initiatives
specially aided by reducing headcount and improving execution on
supply chain and procurement activities. Moreover, the competition
is also heating up as the company faces tough competition from
F5 Networks ( FFIV ),
. We believe that Juniper is well positioned in
the networking space and could capitalize on much of the worldwide
spending on information technology.
The company has a Zacks Rank #4 (Sell).CISCO SYSTEMS (CSCO): Free Stock Analysis
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