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Network
equipment makers, still staggering after a sharp drop in technology
spending by major clients last year, say orders are beginning
to trickle in and hope their fortunes will brighten later
this year. Juniper Networks president and chief executive
Scott Kriens told a San Francisco conference last week that
the broad technology industry has survived the worst of the
downturn—made worse by the Internet boom’s bust
and recession. “I think we are in the back-end of the
fallout phase,” he said.
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Scott
Kriens
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Kriens’
view echoed Juniper’s fourth-quarter report and its current
quarter outlook. The No 2 maker of Internet gear behind Cisco
Systems, in mid-month posted a net loss of $5.1 million, or
2 cents a share, compared with net income of $62.2 million,
or 18 cents a share a year ago. Revenues fell nearly 49 percent
to $151 million.
Juniper said it expects that in its current first quarter
it will post revenues between $150 million and $155 million,
and earnings excluding charges—or pro forma earnings—of
3 cents a share, versus 5 cents in its fourth quarter.
Guidance of essentially flat revenue suggests sales are stabilising
as customers cut excess inventory, or place new orders to
replace ageing equipment, according to analysts.
Gear
makers’ sales plunged throughout 2001 as telecom carriers
and Internet service providers slashed spending.
But there have been recent signs that sales could improve.
Cisco chief executive John Chambers this month said that customer
budgets, while cautious, could rise.
A Ciena vice president of product portfolio management said
it was too early to call a sector rebound, but noted that
inventory excesses are beginning to be corrected. He also
said telecom traffic on major routes was reaching the point
where new investments would be needed.
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