Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Thursday, July 20, 2006

Widely Traded 48 Hour Clock:Juniper, Look Beyond Options

Stocks: (JNPR)(LU)(SI)(ERICY)

Most of the news surrounding Juniper lately has focused on the options probe at the company. It is bad news and it may involve a restatement of earnings, although its affect on cash results will probably be limited.

Juniper has even gone so far as saying that it will not release full second quarter earnings while its board attempts to get its hand around the options problem.

But, the company is not doing badly, at least from an operations standpoint. Q2 revenue rose 15% to $568 million. Net cash rose $200 million during the second quarter to hit $2.25 billion. And, the company plans to buy back $1 billion of its stock.

Juniper, which makes network gear, has revenue in Q2 2005 of $493 million. From there Q3 revenue rose to $546 million. Q4 05 hit $575 million, and Q1 06 had a topline of $566. All four quarters had positive operating income which averaged about 18% of revenue.

Juniper numbers among its large clients the likes of Lucent, Siemens and Ericsson.

Interestingly enough, Morningstar carries a five star rating on Juniper (its highest rating) and carries at $20 fair value on the stock.

However, the stock is nowhere near that level, trading at $14.14, down from its 52-week high of $25.63, so the company has lost over $6 billion in market cap over the last year. With $2.5 billion of cash and a market cap of $8 billion, the stock looks pretty good.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger