Juniper, Infinera book solid Q3 earnings

Rob Powell/Telecom Ramblings
19 Oct 2011
00:00
News
Commentary

Both Juniper Networks and Infinera reported their third quarter 2011 earnings after the market closed today. The equipment makers tend to be quite sensitive to economic trends, and if these two are any indication then the third quarter was pretty smooth but everyone is feeling a bit cautious going into Q4. Here is a quick look at each company’s results:

Infinera Q4 results summary:

$ in millions
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11(guidance)
Revenue
$130.1
$117.1
$92.9
$96.0
$104M
$100-110M
Non-GAAP EPS
$0.18
$0.07
$(0.04)
$(0.11)
$(0.09)
$(0.08-0.12)
Non-GAAP GM%
51%
51%
48%
41%
41%
~40%

Infinera’s Q3 revenue and non-GAAP earnings per share were ahead of both guidance and estimates, which was a welcome result.

Their top customer this time was a large cable MSO, and they saw positive activity in the submarine market and from stimulus funding recipients. They expect some 40G revenue to start showing up in the fourth quarter from undersea customers. Guidance for the fourth quarter was slightly more conservative than analyst estimates, but right in line with my own expectations.

Investors and customers are of course waiting eagerly for the company’s 500G DTN-X in the first half of next year, which will give them a full product portfolio for today’s equipment market and have a material effect on the company’s competitive position. But in the meantime Infinera is making steady progress despite the current economic uncertainty.

Juniper Networks Q4 results summary:

$ in millions
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11(guidance)
Revenue
$1012.4
$1190
$1102
$1120.5
$1105.8
($1160-1220)
EPS (non-GAAP)
$0.32
$0.42
$0.32
$0.31
$0.28
$0.32-0.36
Operating Margin (non-GAAP)
24.1%
24.5%
22.3%
21.6%
20.0%
21-23%

Juniper’s revenues, earnings per share, and operating margin were all right at the midpoint of guidance and very much inline with guidance. That was a welcome shift from the second quarter, which fell a bit short on each front. Guidance for Q4 was, as with Infinera above, somewhat conservative as compared to analyst projections but not at all surprising to me. As the company’s PR noted:

While the long-term fundamentals driving demand for networking solutions are healthy, the macro environment and the impact of the environment on customer capex purchases continues to be uncertain

Yep, we’ll be hearing variations on that tune from many in the next few weeks I think.

This article was authored by Rob Powell and was originally posted on Telecomramblings.com

Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.

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