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Juniper doubles Street
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July 13, 2000: 5:49 p.m. ET
Networking equipment maker's revenue grows 544 percent
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NEW YORK (CNNfn) - Juniper Networks, a maker of equipment that routes high volumes of traffic over the Internet, reported fiscal second-quarter net income that was double analysts' estimates, as its revenue soared.
Mountain View, Calif.-based Juniper said after the close Thursday that its second-quarter net income rose to $28.6 million, or 8 cents per share, versus a loss of $2.96 million, or 3 cents per share, in the same period last year. The mean analyst estimate was 4 cents per share, according to earnings tracker First Call.
Juniper's (JNPR: Research, Estimates) revenue for the quarter rose 544 percent to $113 million from $17.56 million. Its stock surged 17 points to 169-1/2 in regular trading Thursday before the earnings were released. After the earnings report, it added 1-1/2 to 171 in after-hours trading.
The company's gross margin rose to 63.9 percent in the quarter ended June 30 from 54.2 percent in the same period last year. Juniper ended the quarter with $1.2 billion in cash and short-term investments.
In a conference call with analysts, Juniper's management said that the amount of time it takes for the company to obtain some components has lengthened and that it has experienced spot shortages of components. Company execs also said that they expect Juniper's gross margin to rise slightly later this year, then stabilize.
Juniper makes Internet backbone routers that are designed for use by telephone companies and Internet service providers. It competes with networking giant Cisco Systems (CSCO: Research, Estimates). Cisco controls about 85 percent of the high-end router market, while Juniper holds the remaining 15 percent.
Ryan Hankin Kent, an industry research firm, estimated in 1999 that the market for Internet backbone routers was $169 million in 1998 and is expected to increase to about $5.5 billion in 2003.
Juniper's stock has been one of the hottest on Nasdaq over the past 12 months, having risen to 169-1/2 at Thursday's close from a 52-week low of 20-5/16. At its current market cap of $53 billion, Juniper sells for more than 1,000 times what even the most optimistic analysts estimate it will earn in the year 2000. 
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