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Juniper, Foundry blow past estimates

Both young networking firms announce quarterly results that beat Wall Street expectations, and Juniper Networks announces a 2-for-1 stock split.

Juniper Networks and Foundry Networks continued their good fortune today as both young networking firms announced quarterly results that blew past Wall Street expectations.

The strong quarters by the two network equipment makers--as well as good showings from Sun Microsystems, Ariba and other technology firms today--could help restore investors' confidence in tech stocks. The price of technology stocks have plummeted the past several weeks.

Juniper recorded its second consecutive profitable quarter today by reporting a first-quarter net income of $10.5 million, or 6 cents a share. During the same quarter last year, the firm suffered a net loss of $5.7 million, or 13 cents a share. A consensus of analysts had predicted earnings of 3 cents a share, according to First Call.

Juniper, which competes against Cisco Systems in the market for high-end routers that send data across the Internet, earned $63.9 million in revenue, six times last year's first-quarter revenue of $10 million.

The company today also announced a 2-for-1 stock split. The stock split is expected to take effect June 16. The company's shares dropped 14 percent today, falling $29.13 to close at $175.

Argus Research analyst David Toung said Juniper's ability to grab 15 percent of the high-end router market share from Cisco has been impressive and expects Juniper to continue to do well. The company during the past quarter released a new high-end router, called the M160, which runs faster than Cisco's products.

"They introduced the M160 and had big customers right off the bat, such as UUNET and Cable & Wireless, and that's truly impressive," Toung said. "Juniper will continue to make incremental gains on market share vs. Cisco."

Foundry, whose network equipment speed Net traffic for businesses and Internet service providers (ISP), recorded a first-quarter profit of $18.1 million, or 14 cents per share, compared to net income of $1.3 million, or 1 cent a share, during the same period last year. Analysts had expected earnings of 9 cents a share, according to First Call.

Foundry's first-quarter revenue climbed 355 percent, from $15.4 million last year to $70 million this year. Today's strong quarter is Foundry's third consecutive profitable quarter since going public in September.

"There's a lot to be happy about. The company hit on all cylinders," said Foundry chief executive Bobby Johnson.

Johnson also added that the company will ship within the next few weeks a high-end Internet router to compete against Juniper and Cisco.

"When we announced it would be delivered in the second quarter, some people took that as a June date, but we're a few days to a few weeks away," he said.

In recent times, Foundry has focused on the more lucrative service provider market. Johnson said service providers now make up 65 percent of the company's sales, while 35 percent of the revenue came from selling equipment to corporations.