Juniper Profit Warning: Networking Issue or Juniper Issue?
Juniper Networks (JNPR) issued a profit warning yesterday. The warning comes one week before the first ever Juniper Global Partner Summit in Las Vegas. Now, The VAR Guy wonders: Is Juniper suffering a sales slowdown on its own, or does the Juniper warning indicate that the IT networking market — as a whole — faces challenging sales prospects? Hmmm…
First, the quick facts. For its quarter ended December 31, 2011 Juniper says:
- Revenue is now expected to be in the range of $1.11 to $1.12 billion, compared to Juniper’s prior expectation of $1.16 billion to $1.22 billion.
- Non-GAAP Earnings Per Share (EPS) is now expected to be in the range of $0.26 to $0.28 per diluted share, compared to the company’s prior expectation of $0.32 to $0.36.
Service Providers and Router Purchases
That’s a big EPS miss. So what happened? Juniper blamed the weaker-than-expected Q4 performance on a service provider spending slowdown. Juniper stated:
“Although the company’s results are not yet finalized, fourth quarter performance is below the company’s previous outlook primarily due to weaker than expected router demand from service providers. While this was not limited to any single geography, a significant portion of the impact was from US service providers.”
Juniper CEO Kevin Johnson reminded investors that 2011 was a record revenue year for Juniper, despite the Q4 earnings warning. Finalized Q4 results are expected January 26, 2012.
Now, investors and channel partners are left wondering if Juniper’s earnings shortfall is an isolated event or part of a larger spending slowdown for IT networking gear?
The firm answers will arrive over the next few weeks…
- Cisco Systems (CSCO) will deliver Q2 results for fiscal year 2012 on February 8, 2012.
- Hewlett-Packard (HPQ) will deliver Q1 results for fiscal year 2012 on February 22, 2012. Networking is a core piece of the HP revenue pie these days.
In the meantime, The VAR Guy is watching the situation closely. The uneven economy has left The VAR Guy wondering if the IT networking industry will face more pressure…
But how about this ironic twist: Piper Jaffray upgraded Juniper shares for 2012, stating that “2011 is now in the rear-view window.”