NEW YORK, Oct 22 (Reuters) – Network equipment maker Juniper Networks Inc’s <JNPR.O> quarterly results and outlook exceeded Wall Street estimates, adding to hopes that a recovery in telecommunications spending was underway.

And while analysts were concerned that Juniper may be looking at acquisitions after a flurry of deals among rivals like industry leader Cisco Systems Inc <CSCO.O>, Chief Executive Kevin Johnson said he was focusing on in-house development instead.

“We continue to invest in R&D and that investment is paying off,” he told investors on a conference call after the earnings release on Thursday. “Our execution is improving and I’m confident that we’re coming out of the economic downturn stronger.”

Revenue for the quarter ended Sept. 30 fell 13 percent from a year earlier to $823.9 million, but was up 5 percent from the previous quarter and higher than the average analyst forecast of $799.5 million according to Thomson Reuters I/B/E/S.

Net income fell to $83.8 million, or 16 cents per share, from $148.5 million, or 27 cents a share, in the year-ago quarter.

Earnings, excluding items, were 23 cents a share, down from 32 cents a year ago but higher than expectations of 21 cents. Johnson said the results showed it was “indeed in the early phases of an economic recovery.”

For the fourth quarter, Juniper forecast earnings of 23 cents to 26 cents a share, excluding items, and revenue of $860 million to $895 million. The market was expecting earnings of 23 cents a share on revenue of $835 million.

NEW YORK, Oct 22 (Reuters) – Network equipment maker Juniper Networks Inc’s <JNPR.O> quarterly results and outlook exceeded Wall Street estimates, adding to hopes that a recovery in telecommunications spending was underway.

However, analysts said they were still concerned about how the company plans to grow in the long term, particularly in light of recent mergers and acquisitions among rivals, including industry leader Cisco Systems Inc <CSCO.O>.

Revenue for the quarter ended Sept. 30 fell 13 percent from a year earlier to $823.9 million, but was up 5 percent from the previous quarter and higher than the average analyst forecast of $799.5 million according to Thomson Reuters I/B/E/S.

Net income fell to $83.8 million, or 16 cents per share, from $148.5 million, or 27 cents a share, in the year-ago quarter.

Earnings, excluding items, were 23 cents a share, down from 32 cents a year ago but higher than expectations of 21 cents.

“Our Q3 results support that view that we are indeed in the early phases of an economic recovery,” Chief Executive Kevin Johnson told investors on a conference call.

For the fourth quarter, Juniper forecast earnings of 23 cents to 26 cents a share, excluding items, and revenue of $860 million to $895 million. The market was expecting earnings of 23 cents a share on revenue of $835 million.

NEW YORK (Reuters) – Federal agents have for years been tapping the cell phones of drug traffickers and mafia dons, but the latest insider trading bust shows they are now using the method to go after rogue traders and fund managers.

U.S. authorities charged Galleon Group hedge fund founder Raj Rajaratnam last Friday with making up to $20 million in profits on insider information. Key evidence came from court- approved wire taps for the first time ever in a Wall Street insider trading case.

An official government report on court-approved wiretaps shows the majority were used in narcotics cases such as the drug traffickers depicted in the popular HBO series The Wire. Some were for homicide, assault and gambling investigations.

But experts said its use in financial crime investigations should not be so surprising and there could be more as the government steps up its crackdown on insider trading.

“It’s considered a very good technique for something with not a lot of physical evidence,” said Steven Bellovin, a Columbia University professor.

But Jim Dempsey, vice president for public policy at the Center for Democracy & Technology, said wiretaps may be more effective in drug cases than in fighting white-collar crime because they are safer than going undercover and provide timely information such as the locations of future deliveries.

Wiretapping insider trading cases may be less effective because it is hard to sift criminal activity from a large volume of conversations. But Dempsey added that Washington policies could influence how wiretaps are used.

NEW YORK (Reuters) – It isn’t often that big blue gets a black eye.

But on Friday IBM, the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam.

Robert Moffat, senior vice president and head of IBM’s systems and technology group was named as a defendant. Executives at leading chipmaker Intel Corp and management consulting firm McKinsey & Co. were also implicated.

Bob Djurdjevic, an Annex Research analyst who has been covering IBM for over 30 years and is himself a former employee, said the news came as a shock.

“If there’s any company that’s always been a model of pristine behavior, being above it all, it was IBM,” he said.

“I don’t think it will have an effect on IBM’s business because it has deep talent. However, it is a black eye to IBM’s reputation.”

The charges, stemming from wiretaps, included accusations that Moffat passed on to hedge fund New Castle Group insider information on Advanced Micro Devices Inc, obtained through IBM’s business negotiations with the company.

NEW YORK (Reuters) – IBM raised its full-year outlook and reported higher-than-expected quarterly profit on Thursday as its growing focus on higher-margin software and services helped it cope with weak technology spending.

International Business Machines Corp still failed to satisfy investors, whose expectations had risen along with a 24 percent rise in the shares over the past three months. A drop in service contract numbers, an indication of future sales, also worried Wall Street.

“I think people had expected a bigger upside,” said Kim Caughey, an analyst with Fort Pitt Capital. “If you are someone who follows technology closely, the third quarter isn’t a strong quarter — so that they beat at all, I’m happy.”

Indeed, IBM reported third-quarter net profit rose to $3.2 billion, or $2.40 a share, from $2.8 billion, or $2.04 a share, a year earlier. Analysts on average expected a profit of $2.38 per share, according to Thomson Reuters I/B/E/S.

Revenue fell 7 percent from a year earlier to $23.6 billion, but it rose 1 percent from the previous quarter and was better than Wall Street’s forecast of $23.4 billion.

IBM forecast a return to revenue growth in the fourth quarter and said it was ahead of pace to achieve its target earnings of $10 to $11 per share in 2010.

Total gross profit margin rose to 45.1 percent from 43.3 percent a year earlier.

NEW YORK (Reuters) – Cisco Systems Inc plans to buy advanced wireless equipment maker Starent Networks Corp for $2.9 billion to boost its product offerings as phone carriers build out next-generation networks.

In its second major acquisition this month, Cisco said it would pay $35 a share in cash for Starent, a nearly 21 percent premium on its Monday closing price. Shares in Starent — a nine-year old telecommunications gear firm founded by Indian-born entrepreneur Ashraf Dahod — jumped 16.8 percent on Tuesday.

Analysts said the deal was negative for Cisco’s smaller competitor, Juniper Networks Inc, which sells network equipment mainly to telecommunications companies. Juniper shares fell 2.1 percent while Cisco rose 0.5 percent.

“Snatching Starent out from under Juniper is an indication of how far Cisco will go to maintain its market share within core networking products,” said Avian Securities analyst Catharine Trebnick.

While Juniper and others like Alcatel-Lucent SA could put in a competing offer, most analysts said they did not expect this as Cisco’s deal is in cash and appeared fair.

Cisco, the top U.S. network equipment maker, said Starent’s gear — which helps operators handle traffic from smartphones and other Internet devices — will help it offer a near- complete product set for mobile carriers.

UBS analyst Nikos Theodosopoulos said the price is almost 40 times Starent’s 2010 earnings estimates, a multiple that Cisco has not paid since it bought WebEx in 2007.

NEW YORK (Reuters) – IBM’s <IBM.N> dominance in large computer systems called mainframes may make it look like the U.S. government has an open and shut case of monopoly, but upon closer examination it appears there is more competition than critics suggest.

Analysts say the mainframes in question represent a small segment of the broader server market, where rivalry is heating up due to Oracle Corp’s <ORCL.O> planned acquisition of Sun Microsystems Inc <JAVA.O>, as well as, network equipment giant Cisco Systems Inc’s <CSCO.O> recent market entry.

The Computer and Communications Industry Association (CCIA), which urged the U.S. Justice Department to investigate International Business Machines Corp, said the vendor of technology hardware and services had a 100 percent grip in mainframe operating systems.

IBM does dominate when it comes to supplying mainframe systems that run on its own operating system. But analysts say competition exists in other kinds of high-end servers, which similarly process large workloads and serve as the central nervous system for ATMs and airline bookings.

Technology research firm IDC’s data shows IBM’s high-end mainframe products, called System z, accounts for around 10 percent of worldwide server revenue of $53.3 billion.

In overall servers, IBM had 34.5 percent market share, with HP holding around 28.5 percent share, according to IDC.

Analysts said that since customers can switch to other mainframes or other servers, it made sense to look at the broader market.

NEW YORK, Oct 5 (Reuters) – Brocade Communications Systems Inc <BRCD.O> has put itself on the block and Hewlett-Packard Co <HPQ.N> is one of the companies that could be interested in buying the network equipment maker, people familiar with the matter said.

Brocade, which sells routers and switches as well as software to help companies manage data networks, has shopped itself around to potential buyers for a few weeks, the sources told Reuters on Monday. They said the process is still in preliminary stages.

One source described it as “feelers” rather than a formal process, and said a deal may not happen.

A deal for Brocade, whose equipment and software make it attractive to companies seeking to boost their presence in corporate data centers, would be the latest in a whirlwind of technology dealmaking in recent weeks.

One possible buyer is Hewlett-Packard, the world’s No. 1 personal computer maker, which also makes server computers used in corporate data centers.

Sources said HP has looked at Brocade’s assets, but has not yet made a formal bid. That could be because HP is potentially interested in acquiring only certain components of Brocade, one source said.

HP wants to fill holes in its portfolio, especially after Cisco Systems Inc <CSCO.O> moved into its traditional server turf earlier this year, and people familiar with the company’s strategy have said it is looking at both software and networking acquisitions. [ID:nN3089979].

NEW YORK/OSLO (Reuters) – Network equipment maker Cisco Systems Inc struck a deal to buy Norwegian videoconferencing company Tandberg for $3 billion in a bid to dominate the high-growing market of corporate video communications.

Analysts said the move ratchets up competition, and possibly more deals among video conferencing providers like Hewlett-Packard Inc and Polycom, and underscores Cisco’s focus on video conferencing which enables workers everywhere to interact with colleagues and customers online.

The acquisition of Tandberg, a market leader in video conferencing, helps Cisco fill the gap between its high-end TelePresence video meeting service for executives and its WebEx online meeting software used by millions of office workers.

Tandberg offers a variety of desktop and other mid-range products. Its units sell for around $7,500 each, while Cisco’s TelePresence units cost about $250,000.

Jefferies analyst Bill Choi said the combined company would have close to 50 percent market share, and the deal would help Cisco speed up growth of its video business.

“We always expected Cisco to move downstream and this acquisition accelerates its time-to-market by at least 18 to 24 months,” Choi said.

Cisco sees video conferencing driving sales of routers and switches, which help direct Internet traffic and are its traditional bread and butter. Online, high-resolution video requires ample bandwidth as well as advanced network equipment to ensure smooth connections.

NEW YORK, Sept 29 (Reuters) – Accenture Plc <ACN.N> is expected to give an upbeat outlook on Thursday and highlight a recovery in its consulting and outsourcing business, which analysts say is strong enough to withstand competition from rivals bulking up through mergers.

Xerox Corp <XRX.N> on Monday announced a deal for outsourcing business Affiliated Computer Services Inc <ACS.N>, a week after Dell Inc <DELL.O> said it would buy Perot Systems Corp <PER.N>, another technology services provider.

Analysts said these deals validate, rather than threaten, Accenture’s business as they follow the trend of large hardware vendors like International Business Machines Corp <IBM.N> and Hewlett-Packard Co <HPQ.N> boosting their investments in higher-margin services.

With over $25 billion in market capitalization, Accenture is too big for most companies to swallow, analysts said, though some did not rule out a bid some day by a large technology firm like IBM, which offers some of the same services, or Cisco Systems Inc <CSCO.O>, which does not.

“Companies are trying to get into the area that Accenture already has a very strong foothold in. We think it has a strong incumbent position,” said Edward Jones analyst Andy Miedler. He was upbeat about Accenture’s growth outlook and said it was unlikely to feel pressure to consolidate.

Accenture specializes in consulting, technology services and outsourcing, helping companies find ways to improve their operations and cut costs.

Because the economic downturn has forced companies to look for ways to cut costs, Accenture has managed to escape the worst effects of the recession.