Juniper Networks shares fall on weak 4Q guidance
NEW YORK (AP) — Shares of Juniper Networks Inc. slid Wednesday after the networking equipment maker said that its customers are "cautious" about spending and issued guidance for the current quarter that fell short of analyst estimates.
THE SPARK: The Sunnyvale, Calif., company, which supplies other corporations, said that it expects to earn between 19 cents and 22 cents per share for the fourth quarter, excluding one-time items, on revenue of $1.1 billion to $1.13 billion.
Analysts polled by FactSet predicted profit of 24 cents per share on revenue of $1.15 billion for the quarter ending in December.
THE BIG PICTURE: Juniper competes with companies like Cisco Systems Inc. in providing networking equipment and its fortunes depend in large part on demand from companies like AT&T and Verizon. With its profit shrinking for the past seven quarters, it has been cutting costs.
Juniper is one of many technology suppliers to say recently that its customers are cautious, signaling that many businesses are paring spending due to the slowing global economy.
THE ANALYSIS: The company's guidance appears to take into account risks surrounding IT spending in the fourth-quarter, said Cantor Fitzgerald analyst Paul Mansky, and he expects those risks to carry over into early 2013.
"With another one to two quarters of potential bumpiness, we are not compelled to rush into the shares," Mansky wrote in a research note.
He kept a "Hold" rating, but still raised his price target on the stock by $2 to $19, saying he's more optimistic about the second half of 2013.
THE SHARES: Down $1.26, or 7.2 percent, to $16.31 in heavy afternoon trading. Over the past 52 weeks, the company's shares have traded between $14.01 and $25.61, and are down 20 percent this year.