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Optical/IP

Q1 Thrill Ride

12:50 PM -- Kicking off earnings season, Foundry Networks Inc. (Nasdaq: FDRY) is lowering its expectations. (See Foundry Lowers Forecast.)

Is it just me, or have there been surprisingly few of these downgrades, given the weak U.S. economy? Juniper Networks Inc. (NYSE: JNPR) famously noted that any recession would affect its earnings only later. Maybe other technology companies are seeing the same effect.

It appears analyst estimates aren't going down either. But as investment writer John Mauldin points out, Wall Street research often lags reality.

(Not always -- this is a convenient spot to mention that Mark Sue of RBC Capital Markets made the call last month. Although Foundry's numbers outdo even his pessimism.)

The lag isn't new. It can't be easy being the one guy to stick your neck out and say, yes, now is when everything goes sour. If you're wrong, you're labeled an idiot. (Whereas, if you overestimate and are wrong, you get TV appearances and job offers.)

The actual earnings from the March quarter might not be bad, going on the Juniper theory, but it seems likely the predictions for the June quarter are going to disappoint. That could make for a tough couple of weeks.

— Craig Matsumoto, West Coast Editor, Light Reading

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