Juniper Reports Q3 Inline, Street Unimpressed Thus Far

The market does not appear to be particularly forgiving at the moment when it comes to telecom equipment stocks.  Routing giant Juniper Networks (NASDAQ:JNPR, news, filings) reported its third quarter earnings today, and its stock is of course down 3% after hours even after being down 4% in anticipation.  The reason?  Well, Q3 revenue was ever so slightly light but Q4 revenue guidance was actually above estimates.  Likewise, earnings per share was inline and Q4 guidance was a bit above estimates.  Here’s a quick table of Juniper’s numbers in the context of the full year:

	Q1/09	Q2/09	Q3/09	Q4/09 (Guidance)
Revenue	$912.6M	$978.3M	$1012.4M	$1100-1140M
EPS (non-GAAP)	0.27	0.30	$0.32	$0.35-0.37
Operating Margin (non-GAAP)	23.2%	23.9%	24.1%

While Infinera’s Q4 outlook shook some investors yesterday, there appears to be no similar lack of visibility for Juniper over in the routing space.  According to CFO Robyn Denholm: “We exited this quarter with strong demand metrics and good momentum and we are on track to deliver 20% or higher revenue growth for the full year.”

So why is the market so skittish?  Well, I suppose the equipment space can turn on a dime, and they know it – and are very wary.  Can’t blame them I guess, but there seems much less room for capex games at carriers right now.  I don’t get the sense that the timing of bandwidth upgrades is as negotiable as was the case at the end of 2008, even if the economy should turn south.

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Categories: Financials · Telecom Equipment