Earnings Preview: Juniper Networks

Apr.24.12 | About: Juniper Networks (JNPR)

Juniper Networks (NYSE:JNPR) is expected to report Q1 earnings after the market close on Tuesday, April 24, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 13c for EPS and $976.84M for revenue, according to First Call. Management forecasts Q1 adjusted EPS of 11c-14c on revenue of $960M-$990M. They see Q1 adjusted gross margin of 63%-64% and adjusted operating margin of 11%-13%. The whisper number is 13c, in-line with consensus. On the top line, the company is looking to get back on the right track after last quarter's drop snapped a string of revenue increases.

Analyst Views

Telco spending trends remained weak in Q1 and Piper Jaffray believes Juniper will now just only meet the prior Q1 guidance that the firm once thought was conservative. Piper continues to believe the 2H12 will be significantly better for Juniper with pent up telco demand driving accelerating product growth. The firm feels Juniper has a healthy pipeline of new products and Pipe believes the T4000, in the 2H, and PTX, in 2013, will gradually allow Juniper to recapture lost router market share. Despite near-term telco weakness, Piper believes Juniper will benefit from telco capex reacceleration and view the shares as attractive. They rate the stock Overweight with a $25 price target.