Juniper Networks Inc.
) posted adjusted earnings per share (EPS) of 17 cents in the
fourth quarter of 2012, above the Zacks Consensus Estimate of 15
Juniper's fourth quarter revenues inched up 2.0% to $1.14 billion
from the year-ago quarter. The total revenue increased 2.0%
sequentially. The sequential increase in revenue can be
attributed to the growth in Americas revenues, which is again
influenced by the modest improvement in EMEA. The yearly increase
was influenced by the growth in U.S. service providers.
The company generated 74.3% of its consolidated quarterly
revenue from product sales, which dropped 0.02% from the year-ago
quarter. The remaining 25.7% came from service revenues, which
grew 7.4% on a year-over-year basis.
As per geographic segments, the Americas contributed around
53.2%, Europe, the Middle East and America (EMEA) 29.6% and
Asia-Pacific (APAC) 17.1% to total revenue. On a year-over-year
basis, revenue from the Americas was up 16.5% reflecting Service
EMEA revenue was down 15.3% year over year. The company is
facing challenge in the region. Moreover, the company continues
to witness modest improvement in the demand scene, with specific
demand coming from the Western and Southern Europe. Again, APAC
revenue was down 2.4% year-over-year due to a significant decline
in China service provider.
On a GAAP basis, Juniper Networks' gross margin was 35.7% in
the fourth quarter versus 62.3% in the year-ago quarter.
Operating margin was 11.5% versus 11.9% in the year-ago
quarter. Operating expenses increased substantially to $602.1
million, driven by higher research & development expense and
sales & marketing expense.
Net income was $95.7 million compared with $96.2 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 $95.8 million or 19 cents per share versus
$111.8 million or 21 cents in the year-ago quarter.
Balance Sheet & Cash Flow
Total cash, cash equivalents and investments in the reported
quarter were $2.85 billion compared with $4.05 billion in the
previous quarter. Long term debt was $999.2 million, roughly flat
sequentially. Cash flow from operations was $155 million, down
sequentially as a result of an increase in working capital. DSO
was 35 days in the quarter.
First Quarter 2013
The company expects first quarter ending to be in the range of
$1,050 million to $1,070 million. Moreover, non-GAAP gross
margin will be in the range of 64% plus or minus 0.5%.This apart,
non-GAAP operating expenses will be $515 million plus or minus $5
million. Non-GAAP net income per share will range between $0.18
and $0.22 on a diluted basis.
Juniper delivered decent fourth quarter 2012 results by
beating the Zacks Consensus Estimate on the bottom line. However,
year over year comparisons were not much encouraging. Cash
position is not so encouraging while debt remained constant.
Growth in operating expenses was substantial. First quarter
guidance reflects cautious spending nature of its customers. But
we are positive on Juniper's new product traction, focus on
revenue growth, cost reduction initiatives specially aided by
reducing headcount and improving execution on supply chain and
This apart, the company faces stiff competition from
F5 Networks Inc.
Cisco Systems Inc.
) we believe that Juniper is well-positioned in the networking
space and could capitalize much of the worldwide spending on
The company has a Zacks Rank #3 (Hold).
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