Juniper Networks provided an early peak into its first-quarter earnings today, and it isn’t pretty. The network giant warned investors that its first-quarter revenue will likely be $1.09 billion to $1.1 billion, below its previous guidance of $1.15 billion to $1.19 billion.
The reason for the decline, said Juniper, is because of weaker-than-anticipated demand from its enterprise business and also the timing of certain Tier 1 telecom operator deployments in the U.S. and the EMEA region.
The company also said it expects non-GAAP net income per diluted share to be 35 to 37 cents rather than 42 to 46 cents.
Interestingly, Juniper Network’s original first-quarter sales forecast was already 11 percent lower than its first-quarter 2015 figure.
Nevertheless, this news shouldn’t come as a big surprise to investors. During the company’s fourth-quarter earnings call with investors back in late January, Juniper executives noted that 2016 was already showing signs of volatility, referring to the bear market that dominated Wall Street in early 2016.
In addition, a March survey by Goldman Sachs of 23 U.S.-based value-added resellers with insight into networking and enterprise IT hardware trends also hinted at trouble for Juniper Networks. According to the survey, Cisco and F5 Networks were tracking ahead of plan for the first quarter, but Adtran and Juniper were below plan.
Meanwhile RBC Capital said it believes Juniper’s weakness may be specific to a customer. RBC said that seven of Juniper’s top 10 customers in the latest quarter were telecom companies such as Verizon. “Given the comments surrounding both Enterprise and Telecom, we think results are likely customer specific at this time,” RBC analyst Mitch Steves wrote in an investor note this afternoon.
Earlier this year, Juniper acquired optical networking company BTI Systems. The company said it was hoping to accelerate its delivery of open and automated packet optical transport solutions that integrate with its NorthStar controller and also to be able to offer end-to-end provisioning of new services to its customers, particularly its service provider clientele.
