Juniper Networks Earnings Cheat Sheet: Margins Shrink as Costs Rise, Profit Falls

Rising costs hurt S&P 500 (NYSE:SPY) component Juniper Networks (NYSE:JNPR) in the third quarter as profit dropped from a year earlier. Juniper Networks 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 Third Quarter

Results: Net income for the networking and communication devices company fell to $83.7 million (16 cents per share) vs. $134.5 million (25 cents per share) a year earlier. This is a decline of 37.8% from the year earlier quarter.

Revenue: Rose 9.2% to $1.11 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: JNPR reported adjusted net income of 28 cents per share. By that measure, the company beat the mean estimate of 20 cents per share. Analysts were expecting revenue of $1.1 billion.

Quoting Management: “Juniper executed well this quarter, and we are seeing strong customer interest in our new innovations in the data center, enterprise mobility and Converged Supercore,” said Kevin Johnson, chief executive officer at Juniper Networks. “While the macroeconomic environment dictates we remain agile, Juniper is on the right strategic course to deliver continued growth.”

Key Stats:

Gross margin shrank 2.6 percentage points to 64.4%. The contraction appeared to be driven by increased costs, which rose 17.8% from the year earlier quarter while revenue rose 9.2%.

Revenue has risen the past four quarters. Revenue increased 14.5% to $1.12 billion in the second quarter. The figure rose 20.7% in the first quarter from the year earlier and climbed 26.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the second quarter, net income fell 11.5% from the year earlier, while the figure fell 20.5% in the first quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the second quarter, it missed the mark by 4 cents, and in the first quarter, it fell short by one cent.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 41 cents per share to 30 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 98 cents per share, the average estimate for the fiscal year has fallen from $1.24 ninety days ago.

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)