Tuesday, July 18, 2006

Juniper Posts Q2 Sales of $567.5 million, Comments on Stock Option Grants

Juniper Networks reported Q2 sales of $567.5 million, compared with $493.0 million for the same quarter last year, an increase of 15 percent.

The company said it has not completed its review of past stock option practices and therefore could not provide detailed GAAP financial results for the quarter. The Audit Committee has determined that the actual measurement dates for financial accounting purposes of stock option grants issued in the past differ from the actual recorded dates of such awards. Accordingly, Juniper believes it will need to record additional non-cash charges for stock option expenses, but it has not yet determined how much and what additional impacts are to be expected.

Juniper also announced $1.3 billion in write-downs from its balance sheet. The company said its market capitalization has declined since March 31, 2006, and therefore it is evaluating the carrying value of certain long-lived assets, consisting primarily of $4.9 billion of goodwill recorded on its balance sheet at June 30, 2006.

The majority of the goodwill was recorded based on stock prices at the time merger agreements were executed and announced. Juniper expects to record reductions in the carrying value of goodwill and long-lived assets for the Service Layer Technologies segment of approximately $1.3 billion for the quarter ended June 30, 2006. Should the company's market capitalization decrease further, Juniper said it is possible that there could be additional reductions in goodwill in future periods.

Juniper also announced a stock repurchase program valued at up to $1 billion. The company $2.25 billion in net cash and investments on its balance sheet.

Siemens represented over 10% of sales for the quarter.

Sales to Verizon represented 10% of total revenue, not including a large order deferral.



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