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Juniper Darkens 2011 Outlook

The Q2 disappointment is just the beginning, as Juniper says it's clear 2011 won't be as rosy as expected

Craig Matsumoto

July 26, 2011

2 Min Read
Juniper Darkens 2011 Outlook

Juniper Networks Inc. (NYSE: JNPR) is reducing its forecasts for the rest of 2011, saying the economy just isn't going to recover quickly enough.

"The economy has not progressed as we anticipated at the beginning of the year," CFO Robyn Denholm said on Tuesday's earnings call.

Juniper said its revenues for the third quarter, ending in September, will be $1.07 billion to $1.12 billion, short of the $1.22 billion analysts were expecting, according to Thomson Reuters .

Non-GAAP earnings per share will be 26 cents to 30 cents in the third quarter, Juniper officials said -- well down from the 38 cents analysts predicted.

For all of 2011, Juniper now expects revenues to be $4.58 billion to $4.67 billion. That's 12 to 14 percent higher than last year but well off the $4.84 billion analyst consensus.

It's all part of the big disappointment Juniper delivered with its second-quarter earnings Tuesday. Juniper CEO Kevin Johnson had said in June that the quarter was looking "back-end-loaded," implying that sales had been slow. It now appears the pace of business didn't pick up.

On Tuesday's call, Johnson gave a couple of reasons why the rest of the year won't be so hot, either. Partly, it's due to the tough economy, which could particularly affect enterprise and government spending, Johnson said. His comments mirror those of Cisco Systems Inc. (Nasdaq: CSCO), which still sees slow spending out of the public sector.

But Johnson also said service providers spent more quickly than usual in the first half of the year. That is, the big operators spent about half of their expected capital budgets during the first half of the year. Normally, they spend 43 to 45 percent, Johnson said.

Japan, which typically represents 5 percent to 8 percent of Juniper's sales, could be another factor, as the effects of the March disasters have caught up with tech spending. Juniper's second-quarter sales to Japan were down 24 percent from a year ago.

Juniper has a lot of new products coming out, but their real impact is expected to begin in 2012. Johnson updated investors on those:

Table 1: Juniper's Rookie Crop


Shipping Target



By Sept. 30

On-premises beta testing with five customers. One design win.


Later this year

Four design wins

PTX/Coverged Supercore

1Q 2012

Six beta customers, one design win

Source: Juniper Networks Inc.

— Craig Matsumoto, West Coast Editor, Light Reading

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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