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Healthy sales of enterprise network products helped Juniper surpass fourth-quarter expectations.
Revenue for the quarter ended Dec. 31 was $809.2 million, an increase of 36% over 2006’s fourth-quarter revenue. Analysts queried by Thomson Financial were expecting revenue of $786 million.
Net income on an adjusted basis was $151.5 million, an increase of 42% from the fourth quarter of a year ago.
For the full year of 2007, Juniper posted a 23% hike in revenue to $2.84 billion. Net income, on an adjusted basis, increased to $504.3 million from a 2006 adjusted profit of $440.4 million.
Juniper’s enterprise business played a key role in the higher-than-expected results. The company’s Service Layer Technology (SLT) business unit – comprised predominantly of enterprise-class products – grew 20% from 2006 and 29% in the fourth quarter.
“We achieved and exceeded our target of profitability in the fourth quarter for the SLT product segment with a profit of almost $8 million for the quarter on product revenues alone,” said Juniper CEO Scott Kriens in a quarterly conference call with analysts. “We continue to enjoy success in the enterprise market not only for security products but for our routing products as well.”
SLT had an operating margin of 4.8% in the fourth quarter compared with minus10% in the third quarter, according to UBS Warburg.
“It seems like enterprise business is turning the corner, although it may be too early to call victory yet,” states UBS Warburg analyst Nikos Theodosopoulos in a report on Juniper’s quarter.
Juniper will provide an update on the enterprise business next week at an event in New York, where the company is expected to announce a LAN switching line and a partnership with a larger enterprise systems company, perhaps IBM.
“The new product and potential partnership should help achieve improved SLT profitability in ‘08 vs. ‘07,” Theodosopoulos notes.
For the current quarter, Juniper expects revenue of $815 million and an adjusted profit of 24 to 25 cents per share. Analysts are expecting a profit of 24 cents per share on revenue of $798 million.
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