Router giant Juniper Networks (NASDAQ:JNPR, news, filings) offered up a preannouncement yesterday afternoon, lowering guidance for the fourth quarter. That's already the second vendor to say that carriers didn't break open their wallets for Christmas. Last week, Acme Packet kicked off the New Year with similar news.
Juniper lowered estimates for revenue to $1.11-1.12B, down from $1.16-1.22B, and also lowered estimates for non-GAAP EPS to $0.26-0.28 from $0.32-0.36. The lower revenue will also show up in lower gross and operating margins. For comparison in context, here are Juniper's Q3 results. The culprit was simply weaker than expected demand for routers among service providers. Geographically, softness in the US market was significant although the effect was felt elsewhere as well.
It does now look as if earnings season is going to be a bit rocky for the equipment makers, as carriers seem to have pushed out spending. Whether it was just a year-end phenomenon that could swing back in Q1 isn't clear, but I think it simply reflects a bit of nervousness about the economy as a whole in a capital intensive business. Hopefully it is not yet reflected in weaker revenue performance amongst the carriers as well.
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