Juniper (JNPR)beat Wall Street's expectations Tuesday, saying the numbers show it is in the "sweet spot" of the networking industry.

For its fourth quarter ended Dec. 31, the Sunnyvale, Calif., Internet gear maker earned $66 million, or 11 cents a share. That's up from the year-ago $15 million, or 3 cents a share. Excluding some costs, latest-quarter earnings rose to 15 cents a share, putting them a penny ahead of the Thomson First Call analyst consensus estimate.

Revenue more than doubled from year-ago levels to $430 million, beating the $414 million analyst estimate.

"The fourth quarter was strong in every dimension, which completed a year of record performance," said CEO Scott Kriens. "We are in the sweet spot of the new networking industry, with both opportunities and capabilities to extend our growth and leadership strengths in an expanding marketplace."

The company told analysts on a postclose conference call Tuesday that first-quarter revenue would be flat to up 2% on fourth-quarter levels. That could strike some investors as disappointing, seeing as Wall Street had previously forecast a 2% sequential gain in the first quarter. Still, Juniper's first-quarter revenue target of $435 million or so is handily above the $423 million Thomson First Call estimate.

Juniper also, for the first time in memory, offered guidance going out two quarters. For the first half of 2005, new CFO Bob Dykes told analysts that sales would be in the range of $885 million to $895 million. That translates to about $455 million for the second quarter, implying growth of between 3% to 6% over the first quarter's levels. That's roughly in line with the Wall Street estimate that Juniper would grow about 5% between the first and second periods.

While Juniper looks to enjoy reasonable top-line growth, it's seems today's lush margins will shrink.

Sharing his long-term financial expectations, Dykes says he expects gross margins between 66% and 68%. That is down from the 70% in the fourth quarter and the 68% to 69% projected for the first quarter. Explaining his downward margin guidance, Dykes called it merely a "prudent way to run the business," which calls for "reinvestment in the business and right growth model."

Juniper shares rose 4 cents in after-hours action to $26.50.

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