Juniper Networks Admits Recent Quarter, Outlook Are 'Challenging'

By

Facing lower demand and a struggling economic recovery, the recent quarter was far from stellar for Juniper Networks, according to news reports. The company reported profits for the fourth quarter of $96.2 million compared to $190.2 million during the same quarter during the prior year, according to news reports.

In addition, the company’s revenue was $1.12 billion, which was also lower than the prior year’s quarter – $1.19 billion, according to MarketWatch. Analysts were predicting revenue of $1.13 billion, MarketWatch adds, citing data from FactSet Research.

Things are not going to turnaround soon at the company. Juniper predicts revenue for the current quarter to be somewhere between $960 million and $990 million, the company said. That compares to analysts predicting revenue of $1.1 billion, MarketWatch said, citing data from FactSet Research.

As a result of the news, Juniper shares dropped 6.6 percent in after-hours trading on Thursday, CBS News  reported.

The company apparently is blaming the economy and weak demand from service providers for a lot of the lackluster performance. “While the fourth quarter was softer than we had anticipated primarily due to weak demand from service providers, Juniper delivered record revenues in a year where macro economic uncertainty increased as the year unfolded,” said Kevin Johnson, Juniper president and CEO.

“The December quarter was an atypical and unexpectedly weak finish to the year, with reduced spending by some of our largest customers,” Robyn Denholm, Juniper’s chief financial officer, added. “While long-term industry fundamentals remain strong, we expect the near-term environment to remain challenging. We will invest in support of our strategy while continuing our focus on execution and prudent cost management.”

Analysts, quoted by  Reuters, point to the competition in the market. “They (Juniper) continued to suffer from carrier capex, which is weak, and their end markets are becoming more competitive ... especially from HP,” said Rajesh Ghai, a ThinkEquity analyst.

“They are losing share and that has been exacerbated by a soft quarter and you are starting to see that in the gross margins, and that is also evidence that competition has intensified,” added Joanna Makris, an analyst with Mizuho Securities USA.

But Johnson defended company strategy. “During the year, we introduced innovative new products across our portfolio that we believe will enable Juniper to continue to grow faster than the markets we serve. We are confident in our strategy and our innovation pipeline, and we remain committed to delivering differentiated solutions that are highly relevant to our customers,” Johnson said.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO East 2012, taking place Jan. 31-Feb. 3 2012, in Miami, FL. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. For more information on registering for ITEXPO registration, click here.

Stay in touch with everything happening at ITEXPO. Follow us on Twitter.



Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More