Shares in Juniper Networks Inc. dropped in late trading after the networking company warned that it was experiencing ongoing supply chain challenges that are leading to extended lead times and higher logistics and component costs.

For its first quarter ended March 31, Juniper Networks reported earnings before costs such as stock compensation of $156.6 million, or 48 cents per share, up 54% year-over-year. Revenue rose 17%, to $1.372 billion. Both figures were solid beats, with analysts expecting adjusted earnings per share of 43 cents on revenue of $1.34 billion.

Juniper ended the quarter with $1.191 billion in cash, cash equivalents on hand as of the end of March, down from $1.669 billion as of the end of March last year and $1.23 billion as of the end of December. Cash flows were also down to $191.5 million versus $193.1 million a year ago.

The first investor trigger of sorts comes in accounts receivable. Juniper’s days sales outstanding in accounts receivable blew out to 70 days in the first quarter from 65 days this time last year. The company does note that accounts receivable had grown to 76 days in the last quarter, but given its outlook, customers being slow to pay bills is negative.

“Despite market uncertainties, I remain confident in our strategy and our ability to deliver another year of healthy revenue growth based on the momentum we are seeing with our customers, the continued strength of our backlog, and the improvements we are seeing with respect to supply,” Juniper’s Chief Executive Officer Rami Rahim said in the company’s earnings release.

For its outlook, credit is due for honesty, as Juniper spends a surprisingly long time explaining its supply chain issues before getting into the raw figures. Juniper starts by warning that there is a “worldwide shortage of certain components impacting many industries.”

“Similar to others, we are experiencing ongoing supply chain challenges, which have improved in the last quarter, but continue to result in extended lead times, as well as elevated logistics and component costs,” Juniper stated. “We continue to work to resolve supply chain challenges and have increased inventory levels and purchase commitments.”

Juniper added that it believes that despite its best efforts, the issues will persist through 2023 for a portion of its portfolio.

For its fiscal second quarter ending June 30, Juniper expects adjusted earnings per share of 54 cents, plus or minus five cents, on revenue of $1.41 billion, plus or minus $50 million. It didn’t provide a full-year outlook.

None of the supply chain issues is necessarily new, but ghosts of the COVID pandemic past combined with broader geopolitical and macroeconomic issues have caused investors to become somewhat skittish in 2023. As a result, Juniper’s share dropped over 3% in late trading.

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