Network equipment manufacturer, Juniper Networks Inc. (JNPR) posted strong fourth quarter results of 32 cents a share soundly beating both the Zacks Consensus EPS Estimate of 21 cents and the year-ago quarterly EPS of 27 cents. The upside was reflected in the annual results also where the company posted an EPS of 92 cents, towering above the Zacks Consensus Estimate of 67 cents. However, EPS fell 22% from $1.18 reported in 2008 due to a challenging macro economic environment.
Juniper Networks’ upside in earnings was in line with the prevailing Zacks Consensus sentiment. Quarterly earnings estimates remained steady while the yearly Zacks Consensus estimate has gone up by 2 cents in the last 30 days. Overall, two out of the 15 analysts covering the stock have raised their estimate for fiscal 2009. The bullishness stems from higher spending on infrastructure by customers like AT&T Inc. (T). Juniper Networks’ nearest rival Cisco Systems Inc. (CSCO) also witnessed a spike of a penny in the Zacks Consensus Earnings Estimate over the last few days. Out of the 18 analysts covering the stock, two have raised their yearly EPS estimate over the last 30 days.
Juniper Networks’ quarterly revenues rose 2% year-over-year to $941.5 million. However, yearly revenues fell 7% to $3.32 billion in fiscal 2009. The company generated 78% of its quarterly revenue from product sales while the rest came from service revenues. The company generated record levels of deferred revenue on both product and services with strong overall bookings, which led to a product book-to-bill ratio of over one.
Juniper Networks’ Infrastructure Product revenue fell 4.1% while Infrastructure Service revenue rose 14.8% in the reported quarter. However, Service Layer Technologies Product revenue was up 10.8% and Service Layer Technologies Service revenue was up 12.4% in the reported quarter. This partially offset the fall in gross margin. The company derived 54.6% of its revenues from Americas in the reported quarter. Out of the rest, 27.1% was generated from Europe, Middle East and Africa, while 18.3% came from Asia Pacific.
Juniper Networks’ operating margin for the reported quarter however, decreased marginally to 24.4% from 24.5% in the year-ago period despite a fall in operating expenses as a percentage of sales. For the fourth quarter, operating expenses as a percentage of sales declined 60 basis points year over year to 42.5% driven by the company’s continued cost discipline and improved operating efficiency as well as focused resource allocation. For fiscal year 2009, Juniper’s operating margin decreased to 20.2% from 24.2% in fiscal year 2008. The fall is attributed to a lower proportion of high-margin product revenues and a higher proportion of low-margin service revenues.
Juniper Networks ended fiscal 2009 with $2.18 billion in cash and short-term investments compared to $2.19 billion of cash and short-term investments at year-end fiscal 2008. The company generated net cash from operations of $259.6 million in the reported quarter, compared to net cash provided by operations of $215.1 million in the year-ago quarter. Capital expenditures during the quarter were $39.9 million.
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