Feeds

Juniper stalled by Q4 slowdown

Anything Cisco can do. . . .

Secure remote control for conventional and virtual desktops

Juniper Networks is having its Cisco moment, but it doesn't look like it is much to worry about.

Yesterday afternoon, Juniper warned Wall Street that it would not meet its sales targets for the fourth quarter ended in December, echoing a similar slowdown that archrival Cisco Systems had in its Q4 of fiscal 2010 ended in July of that year. But the situations that Juniper is facing now and Cisco was 18 months ago are different.

It might not be fair to call Juniper an upstart, since it has been around for 16 years peddling various networking gear, but when you are going up against a behemoth like Cisco in a skittish economy, you're still an upstart no matter how long you have been in the fight.

When Cisco stumbled back in 2010, it was as much because it had acquired a slew of new consumer businesses and expanded into servers as well as leaving its flanks unguarded in its core routing and switching markets. Cisco had real problems, and had to restructure itself as well as make layoffs to get its costs back in line with its revenues - and the expected profit levels Wall Street expects from Cisco.

In its most recent quarter ended in October 2011, Cisco still had issues relating to its restructuring but seems more afraid of China's Huawei Technologies, a foe that Juniper will have to face down as well in the networking space.

For the prior two quarters, Juniper has been under pressure not only thanks to the economy but to a resurgent Cisco, which is sticking to its switch and routing knitting more than it was two years ago. So it was not much of a surprise when Juniper warned Wall Street that it wasn't going to meet its targets in the final quarter of 2011.

Juniper said that revenues would now be somewhere in the range of $1.11bn and $1.12bn, which is a bit lower than the $1.16bn to $1.22bn that the company told Wall Street to expect when it reported its Q3 numbers back in October. As has been the case for the past three quarters, earnings are under pressure, with non-GAAP earnings per share now expected to be between 26 cents and 28 cents, rather than the 32 cents to 36 cents range Juniper predicted it could hit three months ago.

Juniper said in a statement that it is still counting its beans, but with weaker than expected demand for routers among service providers around the globe. Sales were particularly weak among telcos and network operators in the US.

"2011 was a record year of revenue for Juniper, even though our fourth quarter revenue was weaker than expected due to service provider demand," Kevin Johnson, CEO at Juniper, said in the statement. "We remain committed to our strategy of innovation in high-performance networking as we continue to manage costs and drive excellence in execution."

Juniper had $1.19bn in sales and non-GAAP EPS of 42 cents per share in the fourth quarter of 2010, so both sales and profits are taking hits at the tail end of 2011. We'll know for sure when Juniper reports its financials on January 26 after the markets close.

Speaking of Wall Street, investors more or less shook it off, in stark contrast to the plummeting stock price and market capitalization that Cisco had after it admitted it had overextended itself a bit in 2010. Ironically, Juniper's shares were trading at $20.43 a pop last Friday, and as El Reg goes to press, they are up a smidgen to $21.47 a share. Everyone is blaming the service providers, not Juniper. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
BT said to have pulled patent-infringing boxes from DSL network
Take your license demand and stick it in your ASSIA
Right to be forgotten should apply to Google.com too: EU
And hey - no need to tell the website you've de-listed. That'll make it easier ...
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.