Juniper Softness Mostly Factored In (JNPR, CSCO)

Juniper Networks (NYSE: JNPR) came clean with a slight warning after the close, but the news may be “good enough” if you consider how much some cuts have been elsewhere.  The networking equipment company that competes against Cisco Systems, Inc. (NASDAQ: CSCO) gave guidance today compared to the October 24, 2011 outlook as follows:

Revenues in the range of $1.11 to $1.12 billion, down from the prior range of $1.16 billion to $1.22 billion.  Earnings (non-GAAP) are now seen at $0.26 to $0.28 EPS rather than the prior $0.32 to $0.36 EPS.

Unfortunately, the comparable operating margin is also expected to fall short of its prior range of 21% to 23% “due to lower than expected Non-GAAP gross margins which were impacted by reduced revenue.”  If you take a look at the revenue shortfall, it is small compared to the earnings shortfall.

Juniper shares rose 5.4% to $21.53 on the day against a 52-week range of $16.67 to $45.01, but shares are down about 2.5% around $21.00 in the after-hours session.

This is one of those situations where things could have been worse than what they are being characterized as. Weaker service provider demand was cited.

Today’s news was not entirely priced in, but it appears to have been mostly priced into the stock.

JON C. OGG