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Will Top-Line Contraction Impact Juniper's (JNPR) Q3 Earnings?
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Juniper Networks, Inc. (JNPR - Free Report) is scheduled to release third-quarter 2023 results on Oct 26, after the closing bell. The company delivered an earnings surprise of 8.27%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 5.45%. Despite healthy momentum for AI-driven network solutions, a constrained spending environment stemming from macroeconomic headwinds is likely to have resulted in top-line contraction year over year in the third quarter.
Factors at Play
During the quarter, Juniper introduced cutting-edge features in its Apstra software solution to improve the management of private data center infrastructure. This will likely reduce the complexity of data center operations for enterprises seeking an intuitive technology solution in a dynamic business landscape. The advanced features offer comprehensive end-to-end visibility and in-depth analysis of traffic patterns, enabling performance optimization in a multi-vendor environment. This is likely to have improved Juniper’s third-quarter performance.
In the third quarter, Savant Systems, a leader in smart home and energy solutions, selected Juniper's AI-driven enterprise solutions to enhance the home automation experience. Juniper WIFI Assurance is a cloud service powered by Mist AI. It effectively replaces manual troubleshooting tasks with automated wireless operations to augment the predictability and reliability of WIFI networks. It is likely to have supported the top line during the quarter.
In the to-be-reported quarter, Viettel Group, a prominent telecommunication entity in Vietnam, has opted to deploy Juniper’s MX960 Universal Routing Platform for high-speed connectivity in the Southeast Asian nation. The University of Oxford, the world’s oldest and most prestigious educational institution, has also selected Juniper's cloud-delivered wireless access solution driven by Mist AI to provide a modern digital platform for its students, faculty, staff and guests. These developments are likely to have helped the company’s third-quarter earnings.
However, weak demand trends and cautious customer spending, owing to macroeconomic challenges, are likely to have impacted Juniper’s net sales in the upcoming quarter. Intense competition from industry leaders in each of its served markets is impacting margins. Extended lead times and higher logistics and component costs are headwinds.
Our estimate for revenues from the Cloud vertical is pegged at $321.2 million. For the Service Provider segment, our revenue estimate stands at $416 million. Our estimate for revenues from the Enterprise business is pegged at $653.6 million.
For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,392 million, indicating a decline from the year-ago quarter’s reported figure of $1,415 million. The consensus estimate for adjusted earnings per share stands at 55 cents, suggesting a decrease from 58 cents reported in the prior-year quarter.
Earnings Whispers
Our proven model does not 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 chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 55 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Juniper currently has a Zacks Rank #4 (Sell).
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +3.58% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Nov 2.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.00% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Oct 30.
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Will Top-Line Contraction Impact Juniper's (JNPR) Q3 Earnings?
Juniper Networks, Inc. (JNPR - Free Report) is scheduled to release third-quarter 2023 results on Oct 26, after the closing bell. The company delivered an earnings surprise of 8.27%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 5.45%. Despite healthy momentum for AI-driven network solutions, a constrained spending environment stemming from macroeconomic headwinds is likely to have resulted in top-line contraction year over year in the third quarter.
Factors at Play
During the quarter, Juniper introduced cutting-edge features in its Apstra software solution to improve the management of private data center infrastructure. This will likely reduce the complexity of data center operations for enterprises seeking an intuitive technology solution in a dynamic business landscape. The advanced features offer comprehensive end-to-end visibility and in-depth analysis of traffic patterns, enabling performance optimization in a multi-vendor environment. This is likely to have improved Juniper’s third-quarter performance.
In the third quarter, Savant Systems, a leader in smart home and energy solutions, selected Juniper's AI-driven enterprise solutions to enhance the home automation experience. Juniper WIFI Assurance is a cloud service powered by Mist AI. It effectively replaces manual troubleshooting tasks with automated wireless operations to augment the predictability and reliability of WIFI networks. It is likely to have supported the top line during the quarter.
In the to-be-reported quarter, Viettel Group, a prominent telecommunication entity in Vietnam, has opted to deploy Juniper’s MX960 Universal Routing Platform for high-speed connectivity in the Southeast Asian nation. The University of Oxford, the world’s oldest and most prestigious educational institution, has also selected Juniper's cloud-delivered wireless access solution driven by Mist AI to provide a modern digital platform for its students, faculty, staff and guests. These developments are likely to have helped the company’s third-quarter earnings.
However, weak demand trends and cautious customer spending, owing to macroeconomic challenges, are likely to have impacted Juniper’s net sales in the upcoming quarter. Intense competition from industry leaders in each of its served markets is impacting margins. Extended lead times and higher logistics and component costs are headwinds.
Our estimate for revenues from the Cloud vertical is pegged at $321.2 million. For the Service Provider segment, our revenue estimate stands at $416 million. Our estimate for revenues from the Enterprise business is pegged at $653.6 million.
For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,392 million, indicating a decline from the year-ago quarter’s reported figure of $1,415 million. The consensus estimate for adjusted earnings per share stands at 55 cents, suggesting a decrease from 58 cents reported in the prior-year quarter.
Earnings Whispers
Our proven model does not 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 chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 55 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Juniper currently has a Zacks Rank #4 (Sell).
Juniper Networks, Inc. Price and EPS Surprise
Juniper Networks, Inc. price-eps-surprise | Juniper Networks, Inc. Quote
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Alphabet Inc. (GOOGL - Free Report) is set to release quarterly numbers on Oct 24. It has an Earnings ESP of +0.89% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +3.58% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Nov 2.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.00% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Oct 30.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.