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Technology Stocks : Juniper Networks - JNPR -- Ignore unavailable to you. Want to Upgrade?

To: paul_philp who wrote (2900)	12/21/2001 8:06:59 AM
From: John Carragher	Respond to of 3350

Juniper Will Miss Financial Targets Due to Carriers' Spending Cutbacks By SCOTT THURM Staff Reporter of THE WALL STREET JOURNAL Juniper Networks Inc. reaffirmed the gloom in telecommunications, saying it wouldn't meet fourth-quarter financial targets because of spending cutbacks by carriers. The Internet-equipment maker's shares fell 18%. The Sunnyvale, Calif., company said it expects fourth-quarter revenue of $150 million to $155 million, and earnings per share of five cents, a figure that excludes business expenses such as amortization of goodwill and deferred compensation. In October, Juniper forecast sales of $200 million and earnings excluding items of 10 cents a share. The earnings projection is excluding items that are typically considered part of continuing operations under generally accepted accounting principles. Juniper is the second-largest maker of the routers that direct computer traffic across the Internet, and as recently as early June was thought to be immune to the telecom slump because of increasing Internet traffic. But carriers are slashing spending on all equipment, including Internet gear. For example, Qwest Communications International Inc., which accounted for more than 10% of Juniper's third-quarter revenue, last month halted construction of its network and last week announced additional cuts in equipment spending. The new projection suggests that Juniper's fourth-quarter revenue will fall by nearly half from the $295 million recorded in the year-earlier quarter, when it reported earnings, excluding acquisition-related expenses and deferred stock compensation, of $84.6 million, or 24 cents a share. "These are very tenuous times," Chief Executive Scott Kriens told analysts in a conference call. Telecom carriers are moving "very deliberately and with great caution. When in doubt, they're not spending." Juniper also has been losing ground to industry giant Cisco Systems Inc., which introduced a router in January that matched Juniper's fastest product. Cisco's share of the fast-router market grew to 65% in the third quarter, from 57% six months earlier, according to market-researcher Dell'Oro Group of Redwood City, Calif. Over the same period, Juniper's share declined to 32%, from 39%. Mr. Kriens didn't address the market-share issue directly but told analysts that Juniper's competitive position is "as strong as ever." Mr. Kriens said Juniper customers haven't been canceling orders but are buying in smaller amounts. Several analysts noted that Juniper is expected to introduce a faster router early next year, but they questioned whether carriers, many of whose networks are underutilized, will need the new equipment. "Juniper is in denial," said Ariane Mahler, an analyst at Dresdner Kleinwort Wasserstein, who thinks Juniper's revenue could decline again in the first quarter. Ms. Mahler thinks carriers are now biased against spending on Internet equipment since they still derive the vast majority of their revenue from telephone calls. At 4 p.m. Thursday on the Nasdaq Stock Market, Juniper shares were down $4.08 to $18.85 apiece, well off their 52-week high of $154.75. Juniper plans to announce fourth-quarter results on Jan. 15. Write to Scott Thurm at scott.thurm@wsj.com