Juniper Networks Inc. (JNPR:US), the second- biggest maker of computer-networking equipment, forecast first- quarter profit that exceeded some estimates as wireless carriers bought equipment to upgrade networks.
Profit excluding some items will be 18 cents to 22 cents a share, on sales of $1.05 billion to $1.07 billion, Sunnyvale, California-based Juniper said in a statement. Analysts on average had predicted (JNPR:US) earnings of 21 cents on sales of $1.07 billion, according to data compiled by Bloomberg.
Juniper sells routers and switches to telecommunications carriers, competing with Cisco Systems Inc. (CSCO:US), the biggest supplier of networking gear. Juniper is benefiting from an upgrade cycle in the telecommunications industry as carriers rush to accommodate a surge in data use by smartphone and tablet customers.
“These carriers are going to have to invest to build out their capacity,” said Erik Suppiger, an analyst at JMP Securities LLC. “Juniper has some interesting product upgrades that could help them.”
The shares (JNPR:US) were little changed in extended trading. Juniper advanced 1 percent to $21.50 at the close in New York, for a gain this year of 9.3 percent.
Fourth-quarter earnings excluding some items were 28 cents a share, beating the average 22-cent estimate. Revenue increased to $1.14 billion, compared with a $1.13 billion projection.
Sales to telecommunications carriers and other Internet providers rose 9.3 percent to $739.4 million, while sales to enterprise businesses fell 9.7 percent to $401.4 million.
The fiscal fight in Washington has slowed spending by federal agencies in the U.S., Juniper Networks Chief Executive Officer Kevin Johnson said in an interview. Demand from the top Internet service providers in the U.S. improved, he said.
“Service providers at some point are making decisions about whether to add capacity or modernize their networks,” Johnson said. “What we’re seeing in this quarter were the signs of that investment pattern beginning. It’s still early days, but the number of projects we’re engaged in, and the tone around service provider spending is starting to improve.”
AT&T Inc. (T:US), the largest U.S. telephone company, in November announced $14 billion in new spending over three years to upgrade its wired and wireless networks. The company’s total capital expenditures will be about $22 billion for each of the next three years, AT&T said.
To contact the reporter on this story: Jordan Robertson in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story: Tom Giles at email@example.com