Juniper Delays Earnings Results Amid Stock Option Investigation

Juniper Networks Wednesday was unable to release full details of its second-quarter financial results because an investigation into its stock options has turned up some irregularities that could impact its financials.

The networking vendor disclosed that revenue for the quarter ended June 30 rose 15 percent to $567.5 million, compared to $493 million the same quarter a year ago. However, the company did not disclose its profits for the quarter.

Juniper on May 22 said it was responding to a request for information from the office of the United States Attorney for the Eastern District of New York relating to the company's granting of stock options. At the same time, Juniper said its board also launched a review of its historical stock option granting practices.

The ongoing investigation by the audit committee of Juniper's board has preliminarily concluded that the recorded grant dates of certain stock-option grants differ from the actual measurement dates that should have been used for accounting purposes, said Scott Kriens, chairman and CEO of Juniper, Sunnyvale, Calif., during a conference call.

As a result, Juniper expects to record additional non-cash charges for stock-based compensation expenses, but does not yet know the amount of the charges or what tax or accounting impact may result from the charges."We won't know [until the conclusion of the investigation] the extent of these changes and whether or not it will be material. Because it effects options which, as you know, live over a number of years, it's also hard to know exactly the periods in which any consequences would be reported or any financial changes might be necessary," Kriens said.

Juniper said it expects to miss the deadline for filing detailed quarterly results with regulators because it will delay them until the completion of the board's investigation.

Despite the delay, Kriens showcased several highlights during the quarter, including 27-percent year-over-year growth in its Service Layer Technology (SLT) business. Juniper's enterprise-focused SLT business includes its firewall, SSL, intrusion detection and prevention, J-series routers, Session Border Controllers and application acceleration products.

Kriens also pointed to strength in Juniper's channel business, which he said now includes 6,800 partners worldwide.

Shares of Juniper Wednesday closed down 18 cents at $14.14 prior to the announcement.0