Juniper Networks Earnings: Margins Shrink on Rising Costs, Net Income Falls

S&P 500 (NYSE:SPY) component Juniper Networks (NYSE:JNPR) reported its results for the fourth quarter. 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 Fourth Quarter

Results: Net income for the networking and communication devices company fell to $96.2 million (18 cents per share) vs. $190.2 million (35 cents per share) a year earlier. This is a decline of 49.4% from the year earlier quarter.

Revenue: Fell 5.8% to $1.12 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 21 cents per share. Analysts were expecting revenue of $1.13 billion.

Quoting Management: “While the fourth quarter was softer than we had anticipated primarily due to weak demand from service providers, Juniper delivered record revenues in a year where macro economic uncertainty increased as the year unfolded,” said Kevin Johnson, president and CEO. “During the year, we introduced innovative new products across our portfolio that we believe will enable Juniper to continue to grow faster than the markets we serve. We are confident in our strategy and our innovation pipeline, and we remain committed to delivering differentiated solutions that are highly relevant to our customers.”

Key Stats:

The company has now seen net income fall in each of the last four quarters. In the third quarter, net income fell 37.8% while the figure fell 11.5% in the second quarter and 20.5% in the first quarter.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 26.4%.

Gross margin shrank 4.2 percentage points to 62.4%. The contraction appeared to be driven by increased costs, which rose 6% from the year earlier quarter while revenue fell 5.8%.

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

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 20 cents per share, down from 23 cents ninety days ago. For the fiscal year, the average estimate has moved down from 94 cents a share to 89 cents over the last thirty days.

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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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com