Juniper Networks Shares Plunged: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Juniper Networks (NAS: JNPR) dropped 21% in intraday trading today after the networking equipment maker reported disappointing preliminary earnings and guidance; at least 10 analysts lowered their ratings on the stock.

So what: For the second quarter, non-GAAP EPS of $0.31 missed the $0.34 consensus estimate and increased only 3% year over year. GAAP EPS declined 11% year over year to $0.21. Revenue increased 15% to $1.12 billion, falling short of the $1.15 billion consensus forecast.

Now what: The company said the disappointing results and outlook were the result of, "[A] number of factors ... including mixed signals in the macro economy ..." It emphasized expense control measures to cope with the near-term environment and new products aimed at improving results over the long term, suggesting management doesn't expect near-term improvements. Juniper guided third quarter non-GAAP EPS to $0.26-$0.30 and revenue to $1.07 billion-$1.12 billion. Both are well below consensus expectations for non-GAAP EPS of $0.38 and revenue of $1.22 billion. The negative comments from Juniper are also pressuring stocks of competitors Alcatel-Lucent (NYS: ALU) , Cisco Systems (NAS: CSCO) , and CIENA (NAS: CIEN) , indicating investors are concerned about overall demand and do not believe Juniper's troubles are company specific.

At the time thisarticle was published Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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