Juniper Networks' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Juniper Networks (JNPR)

Q1 2012 Earnings Call

April 24, 2012 5:00 pm ET

Executives

Kathleen Nemeth -

Kevin R. Johnson - Chief Executive Officer, Director, Member of Offering Committee and Member of Stock Committee

Stefan Dyckerhoff - Executive Vice President and General Manager of The Platform Systems Group

Robyn M. Denholm - Chief Financial Officer, Executive Vice President, Member of Concerns Committee and Member of Stock Committee

Analysts

Jeffrey T. Kvaal - Barclays Capital, Research Division

Brent A. Bracelin - Pacific Crest Securities, Inc., Research Division

Brian Marshall - ISI Group Inc., Research Division

Simona Jankowski - Goldman Sachs Group Inc., Research Division

Ehud Gelblum - Morgan Stanley, Research Division

Rod B. Hall - JP Morgan Chase & Co, Research Division

Nikos Theodosopoulos - UBS Investment Bank, Research Division

Mark Sue - RBC Capital Markets, LLC, Research Division

Paul Silverstein - Crédit Suisse AG, Research Division

Tal Liani - BofA Merrill Lynch, Research Division

Tim Long - BMO Capital Markets U.S.

Presentation

Operator

Greetings, and welcome to the Juniper Networks First Quarter 2012 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Kathleen Nemeth, Vice President, Investor Relations for Juniper Networks. Thank you, Ms. Nemeth, you may begin.

Kathleen Nemeth

Thank you, operator. Good afternoon, and thank you, everyone, for joining us. Here on the call today are Kevin Johnson, Chief Executive Officer; Robyn Denholm, Chief Financial Officer; and Stefan Dyckerhoff, Executive Vice President, Platform System.

Before Kevin gets started, I would like to highlight changes to our financial reporting, which are reflected in today's earnings press release. As we have discussed previously, Juniper is aligning our business segment reporting to the company's organizational structure and focus on its platform and software strategy. We believe this change will provide investors with increased financial reporting transparency and will enable better insight into the market and performance trends driving the company's business. Juniper's 2 reportable segments are now the Platforms Systems Division, which will often be referred to as PSD, and Software Solutions Division, or SSD.

Our press release provides a description of each segment including the products within each segment. There is a table included in Appendix 2, which identifies the specific products by segment within routings, switching and security.

The PSD segment aligns primarily with the Infrastructure segment under the historical reporting approach and consists of routing, switching and security products and services. Note that security products, such as the branch SRX, branch firewall and J-Series product families, which are now in PSD were historically reported as part of our SLT segment.

The SSD segment aligns primarily with the SLT segment under the historical reporting approach and consists of security and routing products and services. Note that routing products, such us routing services software, which are now in SSD were historically reported as part of our Infrastructure segment. Detailed information including 2011 and 2010 announced as they would have been reported under the new approach is included in the Appendix of today's press release and are provided in Excel tables on the Investor Relations page of our website. These include quarterly segment revenues with product detail, segment contribution margins and corporate unallocated expenses.

Please remember when listening to today's that statements concerning Juniper's business outlook, economic and market outlook, future financial operating results and overall future prospects are forward-looking statements that involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including economic conditions generally or within the networking industry, changes in overall technology spending, the network capacity requirements of service providers, the timing of orders and shipments, manufacturing and supply-chain constraints, variation in the mix of products sold, customer perception and acceptance of our products, litigation and other factors listed in our most recent 10-K filed with the SEC.

All statements made during this call are made only as of today. Juniper undertakes no obligation to update the information in this conference call in the event, facts or circumstances change after the date of this call.

In discussing the financial results, Robyn will first present results on a GAAP basis. And for purposes of today's discussion will also review non-GAAP results. For important commentary on why the management team considers non-GAAP information a useful view of the company's financial results, please consult our 8-K filed with the SEC today. For the detailed reconciliation between GAAP and non-GAAP results, please see today's press release. In general, non-GAAP results exclude certain nonrecurring charges, amortization of purchased intangibles and other acquisition charges and expenses related to stock-based compensation.

On today's call, Robyn will also be providing forward-looking guidance. As a reminder, guidance is provided on a non-GAAP basis, other than that with respect to revenue and share count. All guidance is forward-looking, and actual results may vary for the reasons I noted earlier.

GAAP guidance measures are not available on a forward-looking basis, due to the high variability and low visibility with respect to certain charges, which are excluded from the non-GAAP guidance estimates.

Please note that today's call is scheduled to last for one hour. [Operator Instructions]

With that, I will now turn the call over to Kevin.

Kevin R. Johnson

Thanks, Kathleen, and welcome, everyone. Juniper executed well in the first quarter, delivering results that were better than forecast in a market environment that, as expected, continue to be dynamic by geography. I'll provide some detail on how we see business unfolding here in the first half of the year, including the solid traction we're seeing with our new products. I've also asked Stefan Dyckerhoff, who heads our Platforms Systems Division, to provide some further depth from the progress we are making on our innovation agenda. After Stefan's comments, Robyn will provide the financial review.

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