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Data Center Infrastructure

Juniper Issues Q1 Warning

Juniper's revenue and income will be below previous guidance in the first quarter, due to reduced demand from enterprises and service provider deployment timing, the company said Monday.

Juniper Networks Inc. (NYSE: JNPR) now expects revenue for the quarter ending March 31 to be $1.09 billion to $1.1 billion, below previous guidance of $1.15 billion to $1.19 billion, "due primarily to weaker than anticipated demand from Enterprise and timing of deployments of certain U.S. and EMEA Tier 1 Telecoms," the company said in a statement. Non-GAAP net income per diluted share will be $0.35 to $0.37 compared with previous guidance of $0.42 to $0.46 per diluted share.

Analysts, on average, expected a profit of 45 cents per share on revenue of $1.18 billion.

Juniper traded at $23.34 after hours Monday, down from its $24.90 opening.

"Although we expect results to be lower than our initial guidance for the first quarter, we remain constructive on fiscal 2016 and expect growth from new products to contribute to our top line, coupled with our ongoing focus on cost discipline to drive non-GAAP operating margin expansion for the full year," Juniper CEO Rami Rahim said in a statement.

The company is expected to report full first-quarter results April 28.

The warning is not a shock, though, and the caution being shown by enterprises and operators will not be limited to Juniper, notes MKM Partners analyst Mike Genovese in a research note issued early Tuesday. He notes that hardware router spending by operators is under review as they consider their virtualization options, while feedback from the enterprise market suggests a slowdown in demand for technology from Juniper and F5 Networks Inc. (Nasdaq: FFIV) in the early part of 2016. Those same checks, however, suggest that demand for Cisco Systems Inc. (Nasdaq: CSCO) gear from enterprise users remains robust, added Genovese.

Juniper had a strong calendar 2015, with $4.9 billion revenue, up 5% year-over-year, and GAAP net income of $633.7 million or $1.59 per diluted share. (See Juniper Reports $4.9B 2015 Revenue, up 5%.)

Earlier this year, Juniper announced its intent to buy BTI, driven by convergence of packet and optical networking to serve the data center interconnect and metro markets. (See Juniper: Packet-Optical Convergence Driving BTI Acquisition.)

That deal, valued at $65 million in cash and other considerations, closed in April. (See Juniper Closes BTI Acquisition to Beef Up DCI.)

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alangonchar 4/12/2016 | 11:25:14 AM
This is hardly a surprise CSP's are holding off on as much new equipment/software until they can figure out virtualization. The question for Juniper is how long will this take?

The other big question for many vendors is how quickly can they replace their old revenue stream with new "cloud" offerings. Big job for sure.

 
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