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		$