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Juniper Networks Reports Preliminary Second Quarter 2011 Financial Results

7.2011 – .
– Revenue: $1,120.5 million, up 15% from Q2-10 and up 2% from Q1-11
– Operating Margin: 15.3% GAAP; 21.6% non-GAAP
– GAAP Net Income Per Share: $0.21 diluted
– Non-GAAP Net Income Per Share: $0.31 diluted, up 3% from Q2-10 and down 3% from Q1-11
Juniper Networks (NYSE: JNPR) today reported preliminary financial results for the three and six months ended June 30, 2011, and provided its outlook for the three months ending September 30, 2011.
Net revenues for the second quarter of 2011 increased 15% on a year-over-year basis, and increased 2% sequentially, to $1,120.5 million.
The Company posted GAAP net income of $115.6 million, or $0.21 per diluted share, and non-GAAP net income of $167.2 million, or $0.31 per diluted share, for the second quarter of 2011.
Non-GAAP net income per diluted share increased 3% compared to the second quarter of 2010 and decreased 3% compared to last quarter. 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 results reflect momentum in our routing business and a return to solid performance in switching. A number of factors, however, including mixed signals in the macro economy, impacted our performance this quarter,? said Kevin Johnson, chief executive officer at Juniper Networks. ?We are confident that our investment in innovation is generating a wave of great products that positions us well to deliver on our multi-year growth agenda.?
Juniper?s operating margin for the second quarter of 2011 decreased to 15.3% on a GAAP basis from 16.1% in the first quarter of 2011, and from 18.9% in the prior year second quarter. Non-GAAP operating margin for the second quarter of 2011 decreased to 21.6% from 22.3% in the first quarter of 2011 and from 23.9% in the prior year second quarter.
?We delivered solid year-over-year growth in the June quarter. However, we saw some moderation in certain areas of the business, which resulted in revenues coming in below our expectations. I?m pleased with our diligent expense control, which enabled us to generate earnings within our guidance range,? said Robyn Denholm, chief financial officer at Juniper Networks. ?We have taken decisive steps to ensure our cost structure takes into account the nearterm revenue environment while preserving investments that support our multi-year growth agenda.?
Other Financial Highlights
Total cash, cash equivalents and investments as of the second quarter of 2011 was $4,220.5 million, compared to $4,083.5 million as of the first quarter of 2011 and $2,736.2 million as of the same quarter of the prior year.
Juniper generated net cash from operations for the second quarter of 2011 of $318.3 million, compared to net cash provided by operations of $239.7 million, in the first quarter of 2011, and $221.3 million in the same quarter of the prior year.
Days sales outstanding in accounts receivable (?DSO?) was 39 days in the second quarter of 2011, compared to 38 days in the prior quarter and 36 days in the same quarter of the prior year.
Juniper repurchased approximately 3.9 million shares in the second quarter of 2011, at an average price of $38.94 per share, or approximately $150 million dollars.
Capital expenditures, as well as depreciation and amortization of intangible assets expense during the second quarter of 2011, were $62.0 million and $41.9 million, respectively.
Outlook
While the long-term fundamentals driving demand for networking solutions are healthy, our outlook for the September quarter reflects some near-term market weakness due primarily to the timing of certain Service Provider deployments. Our overall pipeline is strong and we anticipate many of our recent design wins will begin translating to revenue late in 2011.
– Juniper estimates revenue for the third quarter ending September 30, 2011, to be in the range of $1.070 billion to $1.120 billion.
– Juniper estimates that its non-GAAP gross margin will be in the range of between 65% and 67% in the third quarter.
– Juniper expects its non-GAAP operating margin for the third quarter will be in the range of 19% to 21%
– Juniper estimates that its non-GAAP net income per share will range between $0.26 and $0.30 on a diluted basis, assuming a flat share count and estimated non-GAAP tax rate of 27%. The non-GAAP EPS estimate includes a dilutive impact of approximately $0.02 per share due to net interest expense from our debt.
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 Web Cast
Juniper Networks hosted a conference call web cast July 26, 2011 broadcast over the Internet at: http://www.juniper.net/company/investor/conferencecall.html. The webcast replay of the conference call will be archived on the Juniper Networks website until September 13, 2011.

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).
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.