Juniper's Getting Stalled on Revenues

Juniper Networks Inc. (NYSE: JNPR) reported Tuesday that some service providers are pushing delivery of their orders to January or later. They're ordering the gear now, but they don't want it to arrive yet. That means Juniper is going to end 2011 with a belly flop.

In July, Juniper had predicted full 2011 revenues to be $4.58 billion to $4.67 billion. Now it's looking more like $4.48 billion to $4.54 billion. (See Juniper Makes Its Q3 Numbers.)

Bookings were actually strong. The book-to-bill ratio, which compares new orders to recent old orders, was 1.2 -- indicating that business is going up. What's stung Juniper is the "mix of orders requesting delivery beyond Q4," CFO Robyn Denholm said on the call.

Analysts weren't satisfied with Juniper's hints about what was causing these intentional delays. Finally, CEO Kevin Johnson -- who'd called in from Hong Kong at 5:00 a.m. local time -- spelled it out: A handful of service providers are making accounting maneuvers, delaying their spending until January.

"The attention that service providers are placing on monitoring their capex quarter by quarter has increased in the last 90 days," Johnson said.

For some orders, it would seem to be a double delay, considering Juniper had been expecting some stalled third-quarter spending to emerge in the fourth quarter.

Among the products hit hard by all this is the MX series of routers, sales of which were down 18 percent in the third quarter compared with the second quarter.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:50:59 PM
re: Juniper's Getting Stalled on Revenues

This could take a while. Mike Genovese of MKM mentions in his report today that North American carriers might wait until Q2 to take significant shipments of routers.  So, Juniper's missing Q4 shipments might take more than one quarter to surface.

That would explain why, on the conference call, analysts couldn't get Juniper to say that Q1 should be stronger than usual due to the shipments that are on pause til "after Q4."  I figured it was just public-company guardedness.

It's hard to believe this will be a Juniper-only phenomenon, considering new products are not involved.

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