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:
|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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