Juniper's Q1 revenue falls, earnings plummet

Juniper Networks Thursday blamed a drop-off in new network build-outs for a first quarter plunge in revenue and earnings, though said enterprise revenue did rise.

The company's results for the quarter ended March 31 were in line with previously announced expectations.

Revenue came in at $764 million for the quarter, a 7% drop from the year ago period. Earnings, excluding expenses, charges and other items, totaled $91.6 million, down from $149.5 million in Q1 last year.
Sales to service providers were down by 14% from a year ago, but enterprise revenue was up 13% from the first quarter of 2008.

Enterprises are literally buying into Juniper's total cost of ownership pitch, said CEO Kevin Johnson during a conference call on the quarter's results. Service providers, however, are cutting spending – AT&T, which announced quarterly results earlier this week, is lowering 2009 capital spending by 10% to 15%.

"Juniper has responded well to the challenging macroeconomic environment," Johnson said in a statement. "Our focus remains on balancing short-term market realities with our commitment to creating long-term shareholder value. We're doing that by aggressively and thoughtfully managing operating expenses to ensure that we maintain strong levels of investment in our innovation and customer focused initiatives."
Johnson added that Juniper is looking to keep operating expenses flat to down during this period of market softness while still funding R&D.

Revenue in Juniper's Infrastructure Products Group – comprised mostly of service provider routers – was down 9% from a year ago. Sales in the company's Service Layer Technologies Group – mostly enterprise products and technologies – was down 2% from the first quarter of 2008.

For the second quarter, Juniper expects revenue to be flat compared to the first quarter – $740 million to $780 million – and earnings to hold about steady.