Juniper's Q1 revenue rises 10% to $1.17B, beats estimates
Juniper reported that first-quarter 2014 revenue rose 10 percent year-over year-to $1.17 billion, slightly surpassing its expectations. The vendor initially forecast first-quarter revenue of $1.12 billion to $1.16 billion and adjusted gross margin of 64.0 percent plus or minus 0.5 percent.
However, the company's operating margin declined 0.5 percent due to $122 million in restructuring and other charges. Taking out the one-time items, the operating margin rose to 17.2 percent from 15.7 percent. Meanwhile, net profit jumped to $110.6 million, or 22 cents per diluted share, from $91 million, or 18 cents a share a year earlier.
"Juniper delivered solid first quarter results with strong year-over-year revenue growth," said Shaygan Kheradpir, chief executive officer of Juniper Networks, in the earnings release. "We are seeing continued demand from our customers reflecting a significant opportunity to capture share in meaningful, high-growth Cloud-Builder and High IQ networking across both service provider and enterprise market."
The first quarter was a time of transition for Juniper. In response to shareholder pressure to trim costs, the vendor in February unveiled a new integrated operating plan (IOP) that includes cutting $160 million in operating costs by the first quarter of 2015 and returning capital to shareholders over the next three years. Earlier this month, it announced that it would lay off 6 percent of its employee base.
Stuart Jeffrey, an equity analyst for Nomura, wrote in a research note that while Juniper's IOP is sound, "it still has risks."
"Firstly, this strategy was articulated very early after the appointment of the new CEO," wrote Jeffrey. "Secondly, management is refusing to give any real details on the actual enablers of this strategy, other than to point out Juniper's existing array of assets, citing the need to protect competitively sensitive information."
Regardless of its issues, Juniper saw continual gains in its product and service sets. Driven by strong performance of the MX platform, including its new MX2020/2010 and MX104 lines, routing revenue rose 7 percent year-over-year to $550 million. Switching rose 46 percent year-over-year to $192 million, while security declined 2 percent to $134 million.
From a regional perspective, the Americas led the way with $681 million in revenue, while EMEA and Asia Pacific rose year-over-year to $296 million and $193 million, respectively.
Looking towards the second quarter, Juniper Networks forecast revenue of $1.20 billion to $1.23 billion and adjusted gross margin of around 64 percent, plus or minus 0.5 percent, and adjusted operating expenses at $520 million, plus or minus $5 million.
Shares of Juniper were listed at $24.70, down $1.19 or 4.6 percent, in morning trading on the New York Stock Exchange (NYSE).
- see the earnings release
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