UPDATED 15:20 EDT / APRIL 25 2012

Juniper Beats Earnings Forecast but Remains Cautious About Q2

Networking gear maker Juniper Networks managed to outdo what the market had in mind for the first quarter of 2012, beating analysts’ estimates with a fair margin. Profit came in at 16 cents per share excluding certain items on sales of $1.03 billion, compared with the $998 million and 7 cents a share forecast we reported three days ago.

Reuters reports that Juniper’s stock price rose a bit in after-hour trading, but first quarter earnings were only one highlight of the call. The company warned investors about a decline in demand for its products among telcos during Q2, which accounts for 60 percent of its revenue.

“Service providers continue to be thoughtful with their spending,” a company executive said on a post-earnings call with analysts. The sluggish demand environment has led to delayed investment decisions and project deployment, the executive said.”

Juniper still has ISPs and capable companies to fall back on, but its second quarter outlook failed to meet that of analysts:  15 cents to 17 cents per share on revenue of $1.03 billion to $1.06 billion, compared with Wall Street’s average of 20 cents per share on revenue of $1.05 billion.

“The guidance was OK considering the tenuous carrier router spending environment,” Mizuho Securities USA analyst Joanna Makris told Reuters.”

Another factor that will determine the company’s upcoming performance is, as always, competition. Now more than ever, the market is seeing an influx of new offerings incorporated into a variety of products, even from those outside the networking space.  Dell, for instance, had a network-integrated launch just yesterday.

The major addition to Dell’s portfolio is the  MXL 40 gigabyte Ethernet switch, designed specifically for the  PowerEdge M1000e blade system. In addition to offering a speedier option to customers the latest hardware also packs support for OpenFlow, the de facto standard for software-driven networking.


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