Juniper posts gains but weak forecasts

Juniper posts gains but weak forecasts

Juniper posted big gains in the fourth quarter but forecast weakness in Japan in the first half of 2006.

Juniper Networks on Wednesday posted year-over-year gains in its financial results for the fourth quarter of 2005 but disappointed analysts with its forecasts for the first two quarters of this year.

The maker of routers and security gear in Sunnyvale, California, brought in $US575.5 million (AU$765.27)in the fourth quarter of 2005, ended Dec. 31, compared with $US430.1 million in the same quarter a year earlier, according to a company statement. That represented a gain of 34 percent but fell short of a consensus estimate from analysts polled by Thomson Financial, who expected $US579 million.

Juniper's net income for the quarter was $US105.5 million, with earnings per share of $US0.17, compared with $US66.0 million and $US0.11 per share in the final quarter of 2004. Excluding certain items, the company earned $US0.20 per share, meeting analysts' estimates.

However, on a conference call following the earnings report, the company gave forecasts for the first quarter and first half of 2006 that fell short of analyst expectations. For the current quarter, Juniper expects to make $US0.19 per share, excluding certain charges, on revenue between $US565 million and $US575 million.

That estimate was below analysts' expectations of $US0.20 per share on $US586.5 million in revenue. Its first-half forecast, for earnings between $US0.38 and $US0.39 and revenue between 1.15 billion and $US1.16 billion, also fell short of analysts' expectations. Their forecasts for the first and second quarters combined had totaled more than 42 cents per share on about $US1.2 billion in revenue.

One factor in the weak forecasts was soft demand in Japan, where service providers are planning for their second generation of high-speed network buildouts, said Scott Kriens, Juniper's chairman and chief executive officer. The company said it is seeing strong growth in North and South America and Europe, including Russia.

In after-hours trading late Wednesday in the U.S., the company's shares (JNPR) had fallen more than 7 percent to $US19.99.

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