Juniper Lowers Guidance; Spending Slows

 

Juniper Networks Inc. (JNPR), the No. 2 maker of equipment that powers the Internet, on Wednesday said it lowered its first-quarter revenue outlook amid continued cautious spending by service provider and telecommunications carrier customers. 

Juniper expects revenues for the fiscal first quarter ended March 31 to be between $120 million and $125 million, down from original guidance of $150 million to $155 million. Analysts surveyed by research firm Thomson Financial/First Call on average had expected $139 million in revenue. 

Juniper also expects first-quarter pro forma, fully diluted earnings to be slightly above break-even. Analysts on average had expected Juniper to post a profit of 2 cents a share, with estimates ranging from a profit of 8 cents a share to a loss of 4 cents a share. 

Wall Street has expected that Juniper would suffer as a result of sluggish spending by service providers and telecom carriers. 

Brokerage firm Merrill Lynch last week cut its 2002 and 2003 earnings outlook for Juniper, citing a continued slowdown in customer spending and overcapacity problems. 

Merrill cut its full-year 2002 earnings view to 13 cents a share from 19 cents a share on revenue of $561 million. It lowered its 2003 outlook to 22 cents a share from 36 on revenue of $675 million. It also cut its second-quarter 2002 view to 1 cent a share from 3 cents. 

"We are reducing our earnings estimates due to continued deterioration in the market for communications equipment sold to service providers," Merrill said in a research note, noting it expects carrier equipment spending to decline 11 percent in 2002 and 3 percent in 2003. 

"Juniper is a quality company with a bad end-market," Merrill Lynch analyst Samuel Wilson told Reuters. "Their core router market won't see any recovery until next year." 

Juniper shares closed on Wednesday at $11.92, up 35 cents, or about 3 percent, and slipped to $11.41 in after-market trade. The shares, battered by a brutal downturn in spending on network equipment, have lost 69.5 percent of their value over the past 52 weeks, according to Thomson Financial/First Call.