Juniper's Q3 Sags as Cloud Business Dips
Juniper said Thursday that it will report lower than anticipated revenues for the third quarter because it isn't getting as much cash from the cloud market as expected.
"Revenue for the third quarter of 2017 is now expected to be in the range of $1,250 million to $1,260 million, below the Company's previous guidance of $1,290 million to $1,350 million, primarily due to lower than expected revenue in our cloud vertical," Juniper Networks Inc. (NYSE: JNPR) revealed in a release.
The company now expects non-GAAP net income per diluted share of $0.54 to $0.56, compared to previous guidance of $0.55 to $0.61 per diluted share.
Michael Genovese, managing director at MKM Partners , agrees with the cloud fail conclusion in an analyst note on the miss. Juniper, he writes, is still facing challenges from the move to virtualized routers, cloud competition and its use of expensive custom silicon.
"According to our checks, Juniper likely missed its previous expectations due to the completion of large projects with customers like Amazon [Web Services] and because of competitive incursions by companies such as Arista," Genovese notes.
All of which could be good news for rival Arista Networks Inc. , MKM predicts: "We expect Arista to beat and raise, although estimate inflation and valuation are concerns."
For its part, Juniper has been trying to raise its cloud profile and expertise of late as the entire industry moves to a cloudy, automated and virtual world. Of particular note, in July, Juniper hired Bikash Koley -- formerly of Google (Nasdaq: GOOG) -- as its new CTO. Koley is an open source-oriented engineer, who helped form OpenConfig, an open source group aimed at further facilitating network automation. (See Juniper Hires Google's Koley as CTO and Juniper's AppFormix Aims to Automate via Intent-Based Networking.)
The third quarter ended September 30. Juniper plans to report its full results after market close on October 24.
— Dan Jones, Mobile Editor, Light Reading