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Juniper trounces estimates
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January 16, 2001: 5:57 p.m. ET
Networking equipment maker continues to expand in Cisco's shadow
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NEW YORK (CNNfn) - Networking equipment maker Juniper Networks on Tuesday reported fourth-quarter revenue and net income that blew through analyst estimates, as the company continues to take share from Cisco Systems in the market for very high capacity routers.
Sunnyvale, Calif.-based Juniper (JNPR: Research, Estimates), which sells high-speed routers that form the backbone of the Internet, said pro forma net income, excluding the amortization of goodwill and special charges, was $84.6 million, or 27 cents a share, up from $4.77 million, or 2 cents, in the same period one year ago.
Analysts surveyed by earnings tracker First Call had expected a profit of 18 cents a share in the fourth quarter.
Juniper's fourth quarter revenue soared to $295 million, compared with $201.2 million for the third quarter, and $45.4 million in the fourth quarter of 1999. That total was 14 percent higher than the $259 million in revenue analysts were expecting, according to First Call.
 For the full year, Juniper reported revenue of $673.5 million, compared with $102.6 million in 1999. Pro forma net income for 2000 was $184 million, or 53 cents per share, compared with a pro forma net loss of $4.7 million, or 3 cents, during 1999.
Juniper competes head-to-head against Cisco Systems (CSCO: Research, Estimates) in the market for high-end routers used by telephone companies and other communications service providers. Its customers include MCI WorldCom, Cable & Wireless, A&T/IBM Global Services, Frontier GlobalCenter Inc. and Verio Inc., among others.
In a report issued in April 2000, the research firm RHK said that Juniper had a 9 percent share of the North American core switch and router market, compared to 48 percent for Cisco and 27 percent for Lucent Technologies (LU: Research, Estimates). RHK expects that market to reach $15.8 billion by 2003.
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In a conference call held Tuesday, Juniper said that it expects its first quarter revenue to be 12 to 15 percent higher than in the fourth quarter. For all of 2001, Juniper now expects its revenue to reach $1.5 to $1.6 billion, up from its previous guidance of $1.3 to $1.4 billion. If Juniper hits the upper end of its target, its 2001 revenue would be 138 percent above the $673 million it recorded in 2000.
Gross margin as a percentage of revenue reached 65.7 percent in the fourth quarter, up from 59.4 percent in the same period last year. Juniper said it expects gross margin to be between 62 and 65 percent next year, while sales and marketing expense is expected to range between 15 and 17 percent this year.
At Tuesday's closing price of $128, Juniper's stock sells for a lofty 158 times what analysts expect the company to earn in 2001, and the company carries a market cap of $45 billion. Its stock dropped 38 cents to $127.62 after hours. 
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