LOS ANGELES (AP) -- Shares of Juniper Networks Inc. jumped Wednesday after the data network equipment maker reported better-than-expected quarterly results and issued a cost-cutting target for 2013 that could boost profit.
THE SPARK: Excluding one-time items, profit came to 19 cents per share, Juniper said Tuesday, beating the 16 cents expected by analysts polled by FactSet. Revenue slipped 4 percent to $1.07 billion, still topping the $1.05 billion expected by analysts.
The company's guidance for the current quarter came in short of Wall Street's forecast. Still, some analysts keyed in on management's plan to cut operating expenses by $150 million in 2013 compared with this year.
THE BIG PICTURE: Juniper competes with companies like Cisco Systems Inc. in providing networking equipment and its fortunes depend in large part to demand by companies like AT&T and Verizon.
THE ANALYSIS: Stuart Jeffrey, an analyst with Nomura, called the cost-cutting target "dramatic." He had expected expenses to increase by $151 million that year.
Jeffrey gave the company credit for only some of the target since specific details were not announced and were based on its track record. Still, he raised his estimate for 2014 earnings by 20 percent to $1.57 per share.
Although he trimmed his target price for the shares to $17 from $20 because the company does not return much cash directly to shareholders, he estimated the stock could add another $1.20 if Juniper hit its cost-cutting targets.
SHARE ACTION: Juniper shares rose $1.78, or 12 percent, to $16.59 in afternoon trading Wednesday. Shares are significantly below a 52-week peak of $25.61 reached in October.
