SUNNYVALE, CA--(Marketwire - Oct 23, 2012) - Juniper Networks (NYSE: JNPR)
- Revenue: $1,118 million, up 4% from Q2'12 and up 1% from Q3'11
- Operating Margin: 3.8% GAAP; 16.9% non-GAAP
- GAAP Net Income Per Share: $0.03 diluted, includes $0.16 impact from restructuring and other charges
- Non-GAAP Net Income Per Share: $0.22 diluted, up 16% from Q2'12 and down 21% from Q3'11
Juniper Networks (NYSE: JNPR), the industry leader in network innovation, today reported preliminary financial results for the three and nine months ended September 30, 2012, and provided its outlook for the three months ending December 31, 2012.
Net revenues for the third quarter of 2012 increased 4% sequentially, and increased 1% on a year-over-year basis, to $1,118 million.
The Company posted GAAP net income of $17 million, or $0.03 per diluted share for the third quarter. The GAAP diluted income per share includes $0.16 impact from restructuring and other charges. Non-GAAP net income was $118 million, or $0.22 per diluted share, for the third quarter of 2012.
Non-GAAP net income per diluted share increased 16% compared to the second quarter of 2012 and decreased 21% compared to the third quarter of 2011. The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Share-Based Compensation Related Payroll Tax by Category table below.
Juniper's operating margin for the third quarter of 2012 decreased to 3.8% on a GAAP basis from 8.1% in the second quarter of 2012, and from 12.4% in the third quarter 2011. Non-GAAP operating margin for the third quarter of 2012 increased to 16.9% from 15.0% in the second quarter of 2012 and decreased from 20.0% in the third quarter of 2011.
"Juniper delivered top line revenue growth in the third quarter as we focus on excellence in execution throughout our business," said Kevin Johnson, chief executive officer of Juniper Networks. "Our new products continue to gain traction in the marketplace, and we're aligning our organization to sharpen our focus, enable agility and drive efficiency as we position for 2013."
"Our third quarter results demonstrated a return to year-over-year revenue growth and improved operational performance," said Robyn Denholm, chief financial officer of Juniper Networks. "Long-term demand fundamentals for high-performance networking continue to be positive, yet customers remain cautious in the near-term environment. We remain focused on executing our strategy to drive revenue growth, and with our workforce restructuring largely complete, we're well prepared to capture the market opportunity ahead."
Other Financial Highlights
Total cash, cash equivalents and investments as of September 30, 2012 were $4,048 million, compared to $4,272 million as of the second quarter of 2012 and $4,130 million as of the third quarter of 2011.
Juniper generated net cash from operations for the third quarter of 2012 of $173 million, compared to net cash provided by operations of $212 million in the second quarter of 2012, and $185 million in the third quarter of 2011.
Days sales outstanding in accounts receivable ("DSO") was 32 days in the third quarter of 2012, compared to 34 days in the prior quarter and 36 days in the third quarter of 2011.
Juniper repurchased approximately 14 million shares in the third quarter of 2012, at an average price of $18.00 per share, or approximately $250 million.
Capital expenditures, as well as depreciation and amortization of intangible assets expense during the third quarter of 2012 were $87 million and $48 million, respectively.
Outlook
Long-term fundamentals driving demand for networking solutions are positive, and we are making good progress toward our revenue targets for our new products. Our outlook for the December quarter reflects our customers' continued caution in their investment decisions in what continues to be a challenging environment.
- Juniper estimates revenue for the fourth quarter ending December 31, 2012 to be in the range of $1,100 million to $1,130 million.
- Juniper estimates that its non-GAAP gross margin will be in the range of 63.5% to 64.5% for the fourth quarter.
- Juniper estimates that its non-GAAP operating expenses will be flat compared to the September quarter.
- Juniper expects its non-GAAP operating margin for the fourth quarter will be in the range of 14% to 16%.
- Juniper estimates that its non-GAAP net income per share will range between $0.19 and $0.22 on a diluted basis, assuming a flat share count and estimated non-GAAP tax rate of 32%.
All forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, acquisition-related charges, restructuring charges, litigation settlement charges, gain or loss on equity investments, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and income tax effect of non-GAAP exclusions. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
Conference Call Webcast
Juniper Networks will host a conference call webcast today, October 23, 2012, at 2:00 p.m. (Pacific Time), to be broadcast live over the Internet at: http://www.juniper.net/company/investor/conferencecall.html.
To participate via telephone, in the U.S. the toll free dial-in number is 877-407-8033; outside of the U.S. dial +1-201-689-8033. Please call 10 minutes prior to the scheduled conference call time. The webcast replay of the conference call will be archived on the Juniper Networks website.
About Juniper Networks
Juniper Networks is in the business of network innovation. From devices to data centers, from consumers to cloud providers, Juniper Networks delivers the software, silicon and systems that transform the experience and economics of networking. Additional information can be found at Juniper Networks (www.juniper.net) or connect with Juniper on Twitter and Facebook.
Juniper Networks and Junos are registered trademarks of Juniper Networks, Inc. in the United States and other countries. The Juniper Networks and Junos logos are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.
Statements in this release concerning Juniper Networks' business outlook, economic and market outlook, future financial and operating results, and overall future prospects are forward-looking statements that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: general economic conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending and spending by communication service providers; the network capacity requirements of communication service providers; contractual terms that may result in the deferral of revenue; increases in and the effect of competition; the timing of orders and their fulfillment; manufacturing and supply chain constraints; ability to establish and maintain relationships with distributors, resellers and other partners; variations in the expected mix of products sold; changes in customer mix; changes in geography mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of Juniper Networks products and services; rapid technological and market change; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; significant effects of tax legislation and judicial or administrative interpretation of tax regulations; currency fluctuations; litigation; and other factors listed in Juniper Networks' most recent report on Form 10-Q filed with the Securities and Exchange Commission. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information in this release in the event facts or circumstances subsequently change after the date of this press release.
Juniper Networks believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. For further information regarding why Juniper Networks believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the discussion below.
| |
|
| Juniper Networks, Inc. |
|
| Preliminary Condensed Consolidated Statements of Operations |
|
| (in thousands, except per share amounts) |
|
| (unaudited) |
|
| | |
| |
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| |
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product |
|
$ |
838,179 |
|
|
$ |
861,935 |
|
|
$ |
2,414,714 |
|
|
$ |
2,630,803 |
|
| |
Service |
|
|
280,132 |
|
|
|
243,861 |
|
|
|
809,854 |
|
|
|
697,149 |
|
| |
|
Total net revenues |
|
|
1,118,311 |
|
|
|
1,105,796 |
|
|
|
3,224,568 |
|
|
|
3,327,952 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product |
|
|
334,645 |
|
|
|
286,609 |
|
|
|
907,863 |
|
|
| 844,746 |
|
| |
Service |
|
|
109,835 |
|
|
|
107,583 |
|
|
|
340,946 |
|
|
|
313,551 |
|
| |
|
Total cost of revenues |
|
|
444,480 |
|
|
|
394,192 |
|
|
|
1,248,809 |
|
|
|
1,158,297 |
|
| Gross margin |
|
|
673,831 |
|
|
|
711,604 |
|
|
|
1,975,759 |
|
|
|
2,169,655 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Research and development |
|
|
288,178 |
|
|
|
257,096 |
|
|
|
826,514 |
|
|
|
776,325 |
|
| |
Sales and marketing |
|
|
261,026 |
|
|
|
254,933 |
|
|
|
778,200 |
|
|
|
747,859 |
|
| |
General and administrative |
|
|
49,442 |
|
|
|
44,455 |
|
|
|
152,883 |
|
|
|
133,639 |
|
| |
Amortization of purchased intangible assets |
|
|
1,148 |
|
|
|
1,263 |
|
|
|
3,562 |
|
|
|
4,139 |
|
| |
Restructuring and other charges |
|
|
31,018 |
|
|
|
16,813 |
|
|
|
36,218 |
|
|
|
15,550 |
|
| |
Acquisition-related and other charges |
|
|
250 |
|
|
|
18 |
|
|
|
1,186 |
|
|
|
6,804 |
|
| |
|
Total operating expenses |
|
|
631,062 |
|
|
|
574,578 |
|
|
|
1,798,563 |
|
|
|
1,684,316 |
|
| Operating income |
|
|
42,769 |
|
|
|
137,026 |
|
|
|
177,196 |
|
|
|
485,339 |
|
| Other expense, net |
|
|
(3,956 |
) |
|
|
(15,957 |
) |
|
|
(25,617 |
) |
|
|
(36,107 |
) |
| Income before income taxes and noncontrolling interest |
|
|
38,813 |
|
|
|
121,069 |
|
|
|
151,579 |
|
| |
449,232 |
|
| Income tax provision |
|
|
21,999 |
|
|
|
37,398 |
|
|
|
60,776 |
|
|
|
120,383 |
|
| Consolidated net income |
|
|
16,814 |
|
|
|
83,671 |
|
|
|
90,803 |
|
|
|
328,849 |
|
| Adjust for net loss attributable to noncontrolling interest |
|
|
-- |
|
|
|
(8 |
) |
|
|
-- |
|
|
|
124 |
|
| Net income attributable to Juniper Networks |
|
$ |
16,814 |
|
|
$ |
83,663 |
|
|
$ |
90,803 |
|
|
$ |
328,973 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per share attributable to Juniper Networks common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
$ |
0.03 |
|
|
$ |
0.16 | |
|
$ |
0.17 |
|
|
$ |
0.62 |
|
| |
Diluted |
|
$ |
0.03 |
|
|
$ |
0.16 |
|
|
$ |
0.17 |
|
|
$ |
0.60 |
|
| Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
|
521,178 |
|
|
|
529,286 |
|
|
|
525,419 |
|
|
|
530,994 |
|
| |
Diluted |
|
|
524,537 |
|
|
|
536,583 |
|
|
|
530,343 |
|
|
|
544,086 |
|
| |
| |
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Reportable Segment |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| Platform Systems Division: |
|
|
| |
|
|
|
|
|
|
|
|
| |
PSD Products: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Routing |
|
$ |
488,112 |
|
$ |
524,211 |
|
$ |
1,433,049 |
|
$ |
1,687,587 |
| |
|
Switching |
|
|
145,616 |
|
|
122,172 |
|
|
409,033 |
|
|
339,937 |
| |
|
Security/Other |
|
|
47,822 |
|
|
53,393 |
|
|
135,907 |
|
|
158,557 |
| |
|
|
Total PSD Products |
|
$ |
681,550 |
|
$ |
699,776 |
|
$ |
1,977,989 |
|
$ |
2,186,081 |
| |
PSD Services |
|
|
211,400 |
|
|
180,018 |
|
|
610,608 |
|
|
509,233 |
| |
|
Total Platform Systems Division Revenue |
|
$ |
892,950 |
|
$ |
879,794 |
|
$ |
2,588,597 |
|
$ |
2,695,314 |
| |
|
|
|
|
|
|
|
|
|
|
| |
| Software Solutions Division: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
SSD Products |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Security/Other |
|
$ |
129,848 |
|
$ |
137,933 |
|
$ |
369,515 |
|
$ |
359,793 |
| |
|
Routing |
|
|
26,781 |
|
|
24,226 |
|
|
67,210 |
|
|
84,929 |
| |
|
|
Total SSD Products |
|
$ |
156,629 |
|
$ |
162,159 |
|
$ |
436,725 |
|
$ |
444,722 |
| |
SSD Services |
|
|
68,732 |
|
|
63,843 |
|
|
199,246 |
|
|
187,916 |
| |
|
Total Software Solutions Division Revenue |
|
$ |
225,361 |
|
$ |
226,002 |
|
$ |
635,971 |
|
$ |
632,638 |
| Total |
|
$ |
1,118,311 |
|
$ |
1,105,796 |
|
$ |
3,224,568 |
|
$ |
3,327,952 |
| |
| |
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Product |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| Routing |
|
$ |
514,893 |
|
$ |
548,437 |
|
$ |
1,500,259 |
|
$ |
1,772,516 |
| Switching |
|
|
145,616 |
|
|
122,172 |
|
|
409,033 |
|
|
339,937 |
| Security/Other |
|
|
177,670 |
|
|
191,326 |
|
|
505,422 |
|
|
518,350 |
| Services |
|
|
280,132 |
|
|
243,861 |
|
|
809,854 |
|
|
697,149 |
| Total |
|
$ |
1,118,311 |
|
$ |
1,105,796 |
|
$ |
3,224,568 |
|
$ |
3,327,952 |
| |
| |
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Geographic Region |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 | |
2011 |
| Americas |
|
$ |
560,258 |
|
$ |
556,573 |
|
$ |
1,678,912 |
|
$ |
1,716,892 |
| Europe, Middle East, and Africa |
|
|
321,331 |
|
|
311,255 |
|
|
927,650 |
|
|
940,167 |
| Asia Pacific |
|
|
236,722 |
|
|
237,968 |
|
|
618,006 |
|
|
670,893 |
| Total |
|
$ |
1,118,311 |
|
$ |
1,105,796 |
|
$ |
3,224,568 |
|
$ |
3,327,952 |
| |
| |
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Market |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| Service Provider |
|
$ |
705,257 |
|
$ |
685,013 |
|
$ |
2,071,837 |
|
$ |
2,156,530 |
| Enterprise |
|
|
413,054 |
|
|
420,783 |
|
|
1,152,731 |
|
|
1,171,422 |
| Total |
|
$ |
1,118,311 |
|
$ |
1,105,796 |
|
$ |
3,224,568 | |
$ |
3,327,952 |
| |
|
| |
|
| Juniper Networks, Inc. |
|
| Segment Operating Results |
|
| (in thousands) |
|
| (unaudited) |
|
| |
|
| |
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| |
|
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
|
| Platform Systems Division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product revenue |
|
|
$ |
681,550 |
|
|
$ |
699,776 |
|
|
$ |
1,977,989 |
|
|
$ |
2,186,081 |
|
| |
Service revenue |
|
|
|
211,400 |
|
|
|
180,018 |
|
|
|
610,608 |
|
|
|
509,233 |
|
| |
|
Total PSD revenue |
|
|
|
892,950 |
|
|
|
879,794 |
|
|
|
2,588,597 |
|
|
| 2,695,314 |
|
| |
|
Non-GAAP PSD contribution margin $ |
|
|
|
356,144 |
|
|
|
381,802 |
|
|
|
1,011,877 |
|
|
|
1,214,346 |
|
| |
|
Non-GAAP PSD contribution margin % |
|
|
|
39.9 |
% |
|
|
43.4 |
% |
|
|
39.1 |
% |
|
|
45.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software Solutions Division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product revenue |
|
|
|
156,629 |
|
|
|
162,159 |
|
|
|
436,725 |
|
|
|
444,722 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Services revenue |
|
|
|
68,732 |
|
|
|
63,843 |
|
|
|
199,246 |
| |
|
187,916 |
|
| |
|
Total SSD revenue |
|
|
|
225,361 |
|
|
|
226,002 |
|
|
|
635,971 |
|
|
|
632,638 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Non-GAAP SSD contribution margin $ |
|
|
|
99,776 |
|
|
|
94,549 |
|
|
|
256,165 |
|
|
|
250,339 |
|
| |
|
Non-GAAP SSD contribution margin % |
|
|
|
44.3 |
% |
|
|
41.8 |
% |
|
|
40.3 |
% |
|
|
39.6 |
% |
| Total revenue |
|
|
|
1,118,311 |
|
|
|
1,105,796 |
|
|
|
3,224,568 |
|
|
|
3,327,952 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Segment contribution margin $ |
|
|
| 455,920 |
|
|
|
476,351 |
|
|
|
1,268,042 |
|
|
|
1,464,685 |
|
| Non-GAAP Segment contribution margin % |
|
|
|
40.8 |
% |
|
|
43.1 |
% |
|
|
39.3 |
% |
|
|
44.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate unallocated expenses |
|
|
|
266,505 |
|
|
|
255,190 |
|
|
|
794,188 |
|
|
|
755,496 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Total segment operating margin $ |
|
|
|
189,415 |
|
|
|
221,161 |
|
|
|
473,854 |
|
|
|
709,189 |
|
| Non-GAAP Total segment operating margin % |
|
|
|
16.9 |
% |
|
|
20.0 |
% |
|
| 14.7 |
% |
|
|
21.3 |
% |
| |
|
Amortization of purchased intangible assets |
|
A |
|
(9,041 |
) |
|
|
(6,701 |
) |
|
|
(25,081 |
) |
|
|
(20,213 |
) |
| |
|
Share-based compensation expense |
|
A |
|
(59,115 |
) |
|
|
(60,468 |
) |
|
|
(186,002 |
) |
|
|
(169,633 |
) |
| |
|
Share-based payroll tax expense |
|
A |
|
(103 |
) |
|
|
(135 |
) |
|
|
(1,052 |
) |
|
|
(9,163 |
) |
| |
|
Restructuring and other charges |
|
B |
|
(83,418 |
) |
|
|
(16,813 |
) |
|
|
(88,618 |
) |
|
|
(15,550 |
) |
| |
|
Acquisition-related and other charges |
|
A,B |
|
(250 |
) |
|
|
(18 |
) |
|
|
(1,186 |
) |
|
|
(9,291 |
) |
| |
|
Other |
|
B |
|
5,281 |
|
|
|
-- |
|
|
|
5,281 |
|
|
|
-- |
|
| GAAP Operating income | |
|
$ |
42,769 |
|
|
$ |
137,026 |
|
|
$ |
177,196 |
|
|
$ |
485,339 |
|
| |
| |
| Juniper Networks, Inc. |
| Share-Based Compensation by Category |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| Cost of revenues - Product |
|
$ |
1,162 |
|
$ |
1,241 |
|
$ |
3,499 |
|
$ |
3,400 |
| Cost of revenues - Service |
|
|
3,872 |
|
|
3,705 |
|
|
13,217 |
|
|
12,110 |
| Research and development |
|
|
26,039 |
|
|
26,540 |
|
|
80,316 |
|
|
75,453 |
| Sales and marketing |
|
|
21,382 |
|
|
20,572 |
|
|
64,315 |
|
|
52,969 |
| General and administrative |
|
|
6,660 |
|
|
8,410 |
|
|
24,655 |
|
|
25,701 |
| Total |
|
$ |
59,115 |
|
$ |
60,468 | |
$ |
186,002 |
|
$ |
169,633 |
| |
| |
| Juniper Networks, Inc. |
| Share-Based Compensation Related Payroll Tax by Category |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| Cost of revenues - Product |
|
$ |
3 |
|
$ |
4 |
|
$ |
27 |
|
$ |
299 |
| Cost of revenues - Service |
|
|
15 |
|
|
9 |
|
|
102 |
|
|
938 |
| Research and development |
|
|
29 |
|
|
35 |
|
|
277 |
|
|
3,385 |
| Sales and marketing |
|
|
51 |
|
|
79 |
|
|
556 |
|
|
4,048 |
| General and administrative |
|
|
5 |
|
|
8 |
|
|
90 |
|
|
493 |
| Total |
|
$ |
103 |
|
$ |
135 |
|
$ |
1,052 |
|
$ |
9,163 |
| |
|
| | |
| Juniper Networks, Inc. |
|
| Reconciliation between GAAP and non-GAAP Financial Measures |
|
| (in thousands, except percentages) |
|
| (unaudited) |
|
| |
|
| |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
|
|
September 30, |
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
September 30, |
|
| |
|
|
|
2012 |
|
2012 |
|
|
2011 |
|
|
2012 |
|
2011 |
|
| GAAP Cost of revenues - Product |
|
|
|
$ |
334,645 |
|
$ |
292,589 |
|
|
$ |
286,609 |
|
|
$ |
907,863 |
|
$ |
844,746 |
|
| Share-based compensation expense |
|
C |
|
|
(1,162 |
) |
|
(1,220 |
) |
|
|
(1,241 |
) |
|
|
(3,499 |