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What's in Store for Juniper (JNPR) This Earnings Season?

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Juniper Networks, Inc. (JNPR - Free Report) is scheduled to report third-quarter 2020 results on Oct 27, after the closing bell. In the June quarter, adjusted earnings were in line with the Zacks Consensus Estimate.

The Sunnyvale, CA-based computer network equipment maker is expected to have recorded slightly lower aggregate revenues on a year-over-year basis due to uncertain macroeconomic conditions. This takes into account challenges at some of Juniper’s largest service provider customers with higher logistics and supply chain-related costs owing to the catastrophic impact of the ongoing pandemic.

Factors at Play

During the quarter under review, Juniper unveiled fourth-generation of the Artificial Intelligence (AI)-driven enterprise to incorporate the same in Local Area Network (LAN), Wireless Local Area Network (WLAN) and Wide Area Network (WAN). The solutions, powered by Mist AI, provide end-to-end optimized user experience with automation and insights for greater visibility and control. This is likely to be positively reflected in the upcoming results.

Juniper is likely to have benefited from its go-to-market strategy, favorable customer mix, technological differentiation and cloud vertical strength. The company augmented its lineup of wireless access points (APs) with the launch of four new Mist AI-backed Wi-Fi 6 enabled APs. The product expansion was primarily aimed at leveraging Mist AI to enable remote workers leverage cloud-managed network equipment, thereby enhancing workforce productivity amid COVID-19 crisis. It also revamped South Korea’s Airport Railroad Express by capitalizing on Mist AI-powered MX Series Routers and EX Series Switches.

In the quarter, Juniper collaborated with Macquarie Telecom to incorporate automated and AI-driven innovation across its network, while strengthening the latter’s ‘customer-first’ attitude. It also allied with a Waltham, MA-based mission-critical services provider, Netcracker Technology, for the launch of an avant-garde solution — Enterprise Service Automation. Juniper inked an agreement to acquire Netrounds, a network testing and monitoring expert, in the third quarter to reinforce its lineup of WAN products to provide greater levels of automated assurance to complex networks.

However, adverse foreign currency translations, evolving market conditions post the deadly virus outbreak resulting in higher logistics and supply chain-related costs are likely to have led to soft margins.

The Zacks Consensus Estimate for revenues in the Product segment (comprising Routing, Switching and Security), which contributes for the lion’s share of total revenues, is pegged at $727 million. The projection indicates a decline of 2.2% from the year-ago quarter’s reported figure. The consensus mark for revenues from the Service segment is $398 million, which suggests an increase from $390 million reported in the year-ago quarter.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,131 million, indicating a 0.2% decline. Adjusted earnings per share stand at 44 cents, which suggests a decline of 8.3% from the prior-year quarter’s recorded figure.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Juniper this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Juniper’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 44 cents.

Zacks Rank: Juniper currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Juniper Networks, Inc. Price and EPS Surprise

Juniper Networks, Inc. Price and EPS Surprise

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Bunge Limited (BG - Free Report) is slated to release third-quarter 2020 results on Oct 28. It has an Earnings ESP of +30.00% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Parcel Service, Inc. (UPS - Free Report) is scheduled to release third-quarter 2020 results on Oct 28. The company has an Earnings ESP of +5.40% and carries a Zacks Rank #2, at present.

Regal Beloit Corporation (RBC - Free Report) has an Earnings ESP of +3.24% and a Zacks Rank of 2. The company is set to report third-quarter 2020 results on Oct 28.

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