Juniper Networks has issued lower Q3 2014 guidance, announcing that it expects revenues of $1.1 to $1.12 billion, down from its previous forecast of $1.15 to $1.2 billion.
The Sunnyvale, Calif.-based company attributes the decline to lower-than-expected service orders from service providers, particularly those in the United States.
Non-GAAP earnings per diluted share are now expected to be at 34 to 36 cents, from the previous guidance of 35 to 40 cents, with the decline softened by the company's continued focus on cost reduction initiatives and the benefit of reduced variable compensation for the quarter.
News of the lower-than-expected results should not be all that surprising.
During its Q2 2014 earnings call, Juniper indicated that various issues including mergers and acquisitions were impacting the timing of projects of some U.S.-based service providers. At that time, Robyn Denholm, chief financial and operations officer for Juniper, said that they "expect these delays to impact second-half results."
Juniper will report its Q3 2014 results on Oct. 23 after the market closes.
Shares of Juniper were $20, down 94 cents, or 4.49 percent, in Friday pre-market trading on the Nasdaq stock exchange.
Juniper is not alone. Alcatel-Lucent's (NYSE: ALU) stock fell 7 percent on Friday, while Adtran issued a warning earlier this month that Q3 2014 results will be impacted by slowness in its European and enterprise service lines.
Stuart Jeffrey, a research analyst for Nomura Securities, wrote in an research report that slower spending by large service providers like AT&T (NYSE: T) is having an effect on Juniper and its peers.
"The main unifying theme is weaker telecom carrier spending, especially in the US," wrote Jeffrey. "The fact that market dynamics are challenging is not a surprise, but the scale of some of the misses are."
For more:
- Reuters has this article
- see this release
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