Juniper Networks Earnings Cheat Sheet: Increased Costs Strains Margins as Profit Drops

Rising costs hurt S&P 500 (NYSE:SPY) component Juniper Networks (NYSE:JNPR) in the second quarter as profit dropped from a year earlier. Juniper Networks, Inc. offers products and services that facilitate the deployment of services and applications over the Internet.

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Juniper Networks Earnings Cheat Sheet for the Second Quarter

Results: Net income for the networking and communication devices company fell to $115.6 million (21 cents per share) vs. $130.5 million (24 cents per share) a year earlier. This is a decline of 11.4% from the year earlier quarter.

Revenue: Rose 14.5% to $1.12 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: JNPR reported adjusted net income of 31 cents per share. By that measure, the company beat the mean estimate of 27 cents per share. It fell short of the average revenue estimate of $1.15 billion.

Quoting Management: “Juniper’s results reflect momentum in our routing business and a return to solid performance in switching. A number of factors, however, including mixed signals in the macro economy, impacted our performance this quarter,” said Kevin Johnson, chief executive officer at Juniper Networks. “We are confident that our investment in innovation is generating a wave of great products that positions us well to deliver on our multi-year growth agenda.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 21.8%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 26.4% from the year earlier quarter.

Gross margin shrank three percentage points to 64.4%. The contraction appeared to be driven by increased costs, which rose 25.1% from the year earlier quarter while revenue rose 14.5%.

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 20.5% from the year earlier quarter.

Competitors to Watch: Cisco Systems, Inc. (NASDAQ:CSCO), Alcatel-Lucent (NYSE:ALU), Extreme Networks, Inc (NASDAQ:EXTR), Riverbed Technology, Inc. (NASDAQ:RVBD), ADTRAN, Inc. (NASDAQ:ADTN), Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), Nokia Corporation (NYSE:NOK), Hewlett-Packard Company (NYSE:HPQ), Tellabs, Inc. (NASDAQ:TLAB), and Intl. Business Machines Corp. (NYSE:IBM).

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(Source: Xignite Financials)