Juniper Confident Despite Downturn
The company says this slowdown isn't as bad as 2001's.
Fears of a full-blown recession are everywhere these days, yet despite the predictions of doom and gloom, networking vendor Juniper Networks sees a silver lining: Things aren't as bad as before.
According Juniper's chairman, Scott Kriens, the current market conditions for networking vendors are less disastrous as they were in market bust of 2001.
Kriens has good reason to seem optimistic, with his company continuing to post solid financial results. Juniper's third-quarter revenues hit $947 million, representing an increase of 29 percent over its performance a year earlier. On the net income side of the books, Juniper reported $148.5 million or 27 cents per share, a 75 percent improvement over the $85.1 million -- or 15 cent per share -- it reported in the third quarter of 2007.
"People are buying only what they need," he said. "And we are responding to those needs with a superior operating system in JUNOS and a portfolio of hard-hitting product cycles with immediate benefit in both operational savings and value added to our customers in their markets."
The quarter was particularly noteworthy for Kriens as well in that he stepped down as CEO to become chairman. He was replaced in September by former Microsoft executive Kevin Johnson.
During the call, Juniper executives also elaborated on some of the company's key partnerships and customers that are helping to fuel growth. While Juniper is active in the carrier space, Robyn Denholm, the company's CFO, noted that Verizon now represents 13 percent of its revenues. She added that no other Juniper customer represents greater than 10 percent of revenues.
Johnson also said IBM has proven an important partner. "They are reselling our EX switches, and we're going to continue to focus on strengthening our partnerships with all of our channel partners, IBM included," he said.Juniper's EX switch line, which debuted earlier this year, marked a critical new product line for the company, as the networking vendor's first foray into the switch market.
Johnson was also bullish on the market opportunities of Juniper's new SRX and Intelligent Services Edge platforms, both of which are aimed at helping operators to increase service revenues and performance.
Even with a strong product portfolio, the current macroeconomic climate has Juniper executives remaining cautiously optimistic about their forward-looking prospects.
The company raised its full-year, per-share earnings guidance, from $1.14 to $1.16 to between $1.17 and $1.20. Fourth-quarter guidance includes revenue of between $921 million and $971 million. Full-year revenues will come in between $3.57 billion and $3.62 billion, which Denholm said is "roughly in line" with previous guidance, although the company had previously given a lower end of $3.59 billion.
In Kriens' view, the current slowdown is not going to have the same effect on Juniper that the market crash of 2001 had on the networking sector.
"I think the major difference this time ... is that, first of all, the slowdown and the hit was a direct one on the networking industry itself, and this one is indirect -- in the economy, more generally," Kriens said. "But specific to our markets, the biggest difference is that the networking industry, from a capacity standpoint, was dramatically overbuilt in 2001 from massive speculation ... 'this' couldn't be further from the truth right now."
Article courtesy of InternetNews.com