Bloomberg News

Juniper Rises on Speculation of AT&T Orders: San Francisco Mover

February 15, 2012

Feb. 15 (Bloomberg) -- Juniper Networks Inc., the second- largest maker of networking equipment, jumped 7 percent on speculation that AT&T Inc. may step up orders.

Juniper shares rose to $24.16 at the close in New York, the biggest gain since Dec. 20. The stock has climbed 18 percent this year.

AT&T released its internal capital-expenditure budget, and its orders to equipment suppliers appear “reasonably healthy,” according to a report today from Jefferies & Co. Networking companies have been suffering from sluggish spending by telecommunications-service providers -- a slump that caused Juniper’s first-quarter forecast to miss estimates last month. AT&T, based in Dallas, is the largest phone company in the U.S.

The release of AT&T’s budget will be “an important catalyst” for Juniper and other equipment vendors because they’ll be able to ship products to meet the phone company’s orders, George Notter, an analyst at Jefferies in San Francisco, said in the report. The uptick in orders should spread to other carriers, such as Verizon Communications Inc. and Sprint Nextel Corp., he said.

“Looking at the bigger picture, we expect that CapEx spending will accelerate shortly among carriers,” Notter said.

Juniper, which ranks second to Cisco Systems Inc. in the networking-equipment industry, gets more than 60 percent of its revenue from phone and cable companies and other Internet service providers.

Profit before certain items will be 11 cents to 14 cents a share this quarter, the Sunnyvale, California-based company said last month in a statement. Sales will be $960 million to $990 million. Analysts had estimated 27 cents in profit and sales of $1.1 billion, according to a Bloomberg survey.

--With assistance by Sarah Gill in New York and Jordan Robertson in San Francisco. Editors: Tom Giles, Nick Turner

To contact the reporter on this story: Nick Turner in San Francisco at nturner7@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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