Juniper Q1 and outlook top expectations even as global chip shortage weighs
Networking equipment stalwart Juniper Networks this afternoon reported Q1 revenue and profit that topped Wall Street's expectations, and projected this quarter higher as well, even though its business is being affected by the global chip shortage, it said.
In a separate "commentary" document, CFO Ken Miller, the chip shortages are going to last a few quarters, though the company has enough chips to get by for this year's planned business:
There is a worldwide shortage of semiconductors impacting many industries. Similar to others, we are experiencing ongoing supply constraints which have resulted in extended lead times. We have invested to strengthen our supply chain and have increased inventory levels over the course of the last year. We continue to work closely with our suppliers to further enhance our resiliency and mitigate recent disruptions outside of our control. Despite these actions, we believe extended lead times will likely persist for the next few quarters. While the situation is dynamic, at this point in time we believe we will have access to sufficient semiconductor supply to meet our full-year financial forecast.
Juniper shares rose 3% in late trading.
CEO Rami Rahim called the results "strong," adding that the company "experienced better than expected product orders across each of our customer verticals."
Added Rahim, "Momentum is strong entering the June quarter and we are confident regarding our growth prospects.
We believe the success we are seeing is a result of the deliberate actions we have taken to strengthen our product portfolio and go-to-market organization, both of which are enabling us to capitalize on attractive end-market opportunities now and in the future."
Revenue in the three months ended in March rose 8%, year over year, to $1.074 billion, yielding a net profit of 30 cents a share, excluding some costs.
Analysts had been modeling $1.05 billion and 25 cents per share.
This was the first quarter that Juniper broke out results for its individual product categories. During the quarter, revenue from what the company calls "Automated WAN solutions" was the star, rising 23%, year over year, to $386 million. Another particularly strong area was "AI-Driven Enterprise" revenue, which rose 13%, to $161 million. Revenue from "cloud-ready data center" products declined 10%, year over year, to $157 million. And maintenance and professional services revenue rose slightly.
Juniper additionally said its security revenue rose 11%, to $163 million.
This was also the first quarter in which the company disclosed its annualized recurring revenue, a common measure of a company's pipeline of signed business. ARR rose 28% in the quarter, the company said.
For the current quarter, the company sees revenue of $1.14 billion, plus or minus $50 million, it said. That compares to consensus for $1.12 billion. EPS is seen in a range of 33 cents to 43 cents, above consensus for 37 cents per share.
Despite the chip challenge, the company raised its outlook for this year, forecasting revenue growth of 4% to 5%, a point higher than previously expected. However, that is being boosted by "recently acquired assets," said Juniper.
Juniper's two most-recent acquisitions were for Apstra, in January, for undisclosed terms, and 128 Technology Inc., in October, for $450 million.
By market, this year, the company expects its enterprise sales to grow the fastest, it said, while "cloud is expected to grow towards the high-end of our long-term model range, and Service Provider is now expected to be flat to slightly up versus last year."