Today after the market closes, two of the most dynamic telecommunications equipment companies will kick off the Q1/10 earnings season: Infinera (NASDAQ:INFN, news, filings) and Juniper Networks (NASDAQ:JNPR, news, filings). Together, they will give us a pretty good first look into how the equipment sector has been faring, as well as offer an initial view into carrier spending. Here's a quick look at each company's guidance and current analyst expectations in the context of their 2009 performances. Q1/09 was at the very bottom of the recession, so of course all trends point upward sharply right now. But Q1 isn't a seasonally strong quarter and while conditions have improved it has seemed more steady than spectacular, so any potential for fireworks is probably limited.
Q4/09 was a big quarter for Juniper, as they seemed to burst free of the recession's grip. Revenues will be down sequentially but analysts apparently think Juniper had a pretty decent Q1 and are looking for both revenue and earnings per share near the top of guidance. That seems reasonable to me given that there was probably some caution in the numbers and as it turned out no disaster struck the sector in the meantime. The big questions on the call are probably going to center around Juniper's strategy for video in light of Cisco's Tandberg aquisition and their own recent purchase of Ankeena.
Infinera also had a decent Q4/09, but also guided Q1 revenues to be up slightly sequentially. As with Juniper, the analyst community thinks Infinera should come in at the top of its guidance and I have no quarrel with that either. The big questions on the call will probably center around the timing of the company's new 40G product that is scheduled to appear in a year or so. If the schedule is accelerated, good things will happen - but a delay would hurt. Everyone will also be watching the new executive team in action and looking for any changes to the current game plan.
Any opinions on what to expect?
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