Juniper Networks (NYSE: JNPR) saw first-quarter 2013 results rise 3 percent year-over-year to $1.06 billion, as the vendor saw an uptick in orders from various segments of the service provider community.
Its operating margin increased to 8.2 percent on a GAAP basis from 4.6 percent a year earlier, but decreased from 11.5 percent in the fourth quarter of 2012.
The vendor said it was seeing demand from its U.S. service provider customers and some signs of "improving demand from EMEA service providers."
One potential wrinkle that could impact Juniper going forward is that AT&T (NYSE: T), which consists of 10 percent of the vendor's sales, said during its Q1 earnings call that it reduced its capex forecast for 2014 and 2015.
In addition, Juniper is facing increased competition in the edge and core routing market from Alcatel-Lucent (NYSE: ALU), which is gaining traction in large service provider accounts such as CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ).
"The U.S. market for routing continues to strengthen as we anticipated, while Verizon and AT&T were 10% customers for us in the quarter, and we continue to see good demand trends with Tier 1 service providers and other verticals, like content providers and cable," said Kevin Johnson, chief executive officer of Juniper Networks, during the earnings call. "APAC and EMEA were weaker in the quarter, though we are seeing signs of modest improvement in demand in service providers in Europe."
Driven by U.S. service provider demand and deployment of edge platforms to support business and broadband services, routing revenue was $488.1 million, up year-over-year from $458 million in Q1 2012. Overall service provider revenue was $713 million, down 4 percent sequentially, but up 4 percent on a year-over-year basis.
"Routing was a highlight in the quarter, with particular strength in U.S. carrier," Johnson said. "The content and cable segments of U.S. service provider also showed good momentum. We are seeing continued signs that service provider capex is improving at a time when our portfolio of new routing products are being well-received by our customers."
To address new growth needs, Juniper recently introduced 2 x 100 Gbps line cards for the MX2020. And while the overall core market declined in 2012, the vendor is seeing greater interest in the PTX product family and the recent introduction of its T4000 multichassis platform.
Looking toward Q2 2013, Juniper "expects to see a continuation of U.S. service provider capital spending as well as moderately improved demand trends in EMEA," but continued weakness in enterprise spending. It has forecast second-quarter revenues to be in the range of $1.07 to $1.1 billion.
Shares of Juniper closed at $17.36 at the end of the day on Tuesday on the New York Stock Exchange (NYSE).
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Article updated April 24 to include new information on Juniper's quarterly earnings.