Juniper Networks profit beats as cost cuts bear fruit
(Reuters) – Network gear maker Juniper Networks Inc (JNPR.N) reported a better-than-expected adjusted quarterly profit as cost-cutting paid off, sending its shares up 4.4 pct in after-hours trading.
Juniper, which gets about two-thirds of its revenue from telecom companies, said in April that it would reduce its 9,483-strong workforce by about 6 percent and focus on its high-growth businesses.
The company announced additional cost reductions of about $100 million in October as it faced slowing revenue growth in the second half of the year.
Two of the company’s largest customers, AT&T Inc (T.N) and Sprint Corp (S.N), are taking time to decide whether to upgrade wired networks or shift to 4G.
Juniper’s operating expenses fell about 13.4 pct to $526.9 million in the fourth quarter, excluding a non-cash goodwill impairment charge of about $850 million.
“It’s been a cost-cutting story and remains a cost-cutting story,” Needham & Co analyst Alex Henderson said.
Aggressive cost-cutting had resulted in operating expenses coming in $16 million less than the market had expected, Henderson said.
Including the goodwill impairment charge, Juniper reported a net loss of $769.6 million, or $1.81 per share, in the quarter ended Dec. 31, compared with a profit of $151.8 million, or 30 cents per share, a year earlier.
On an adjusted basis, the company earned 41 cents per share, well above the average analyst estimate of 31 cents.
Revenue fell 13.5 percent to $1.10 billion as telecom service providers continued to delay spending, but still beat the average analysts’ estimate of $1.01 billion, according to Thomson Reuters I/B/E/S.
Last week, rival F5 Networks Inc (FFIV.O) reported revenue that missed Wall Street’s average estimate for the first time in eight quarters. F5 cited a decline in the number of large deals.
Up to Monday’s close, Juniper shares had fallen about 21 percent in the past year.
(Editing by Simon Jennings)