Earnings Preview: Juniper Networks

| About: Juniper Networks (JNPR)

Juniper Networks (NYSE:JNPR) is expected to report Q2 earnings after the market close on Tuesday, July 24, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 16c for EPS and $1.05B for revenue, according to First Call. The company is hoping to snap a string of two-straight quarters of revenue declines. Guidance is for Q2 adjusted EPS of 15c-17c on revenue of $1.03B-$1.06B. The macro-economic uncertainty surrounding the European debt crisis has forced enterprises to cut spending on network infrastructure, which in turn is impacting Juniper's earnings.

Analyst Views

Stifel Nicolaus' checks show that Juniper's Q2 is likely to come in at the low-end to mid-point of revenue guidance. The quarter was off to a modestly solid start, with trends better vs. Q1. -- however, Stifel did see some moderation in demand in the back-half of the quarter. Overall, the firm believes that Juniper should be able to post an in-line Q2. Despite the release of the T-4000 and the PTX, Stifel continues to see issues around sales of Juniper's core routers -- some being competition from Cisco (NASDAQ:CSCO) and Alcatel-Lucent (ALU). Stifel said multiple data points suggest 2H12 should look better than 1H12 for Juniper. Stifel believes that given issues around Juniper's core router sales along with European capex problems, guidance is likely to fall short of consensus. Still, given that nearly 40% of Juniper's market cap is in cash and that expectations are generally low heading into Q3 -- Stifel believes that the risk-reward might be starting to look favorable.