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To: Sully- who wrote (46400)	1/14/2002 11:00:15 PM
From: Sully-	Respond to of 65232

Network Gear Makers' Guidance to Be Mixed-Analysts By Jim Christie SAN FRANCISCO (Reuters) - Smaller network equipment makers such as Extreme Networks Inc. (Nasdaq:EXTR - news) are more likely to give optimistic guidance this week than networking giants such as Juniper Networks Inc. (Nasdaq:JNPR - news), which are under pressure as telecom carriers slash budgets for new equipment, analysts said on Monday. Juniper, the No. 2 maker of gear for routing Internet traffic, has cautioned that it expects fourth-quarter earnings, which it will post on Tuesday, to be half of what Wall Street expected and its revenue to disappoint due to the weak economy. Juniper is one of the largest of a clutch of big networkers that found themselves trapped in a brutal downturn last year as carriers cut capital spending to combat a glut of equipment inventory. Telecommunications companies ranging from Local telephone companies Qwest Communications International Inc. (NYSE:Q - news) and BellSouth Corp. (NYSE:BLS - news) to long-distance voice and data company WorldCom Inc. (Nasdaq:WCOM - news) have all forecast reduced spending and tough times ahead in 2002. With the telecoms sector hurting, Juniper said its fourth-quarter revenue will be between $150 million and $155 million, down from the $201 million forecast in October. Analysts polled by Thomson Financial/First Call on average expect Juniper to post $152.5 million in revenue and earn 5 cents a share excluding goodwill -- a revised estimate from 10 cents a per share last month before Juniper warned. Juniper in the same period a year ago posted earnings of 24 cents per share excluding goodwill. Juniper's December warning stunned analysts, who now hope the Sunnyvale, California-based company can hold the line on revenue in its first quarter. ``The question on Juniper will be guidance for the first quarter,'' said Ilya Grozovsky, a SoundView Technology Group analyst. ``The assumption is you are looking at flat first-quarter guidance.'' ``I don't think there is any question the (first) quarter will be weak,'' said Aalook Shah of Pacific Crest Securities. ''Telecommunications service providers just are not spending money, or if they are it is very limited.'' Ciena Corp. (Nasdaq:CIEN - news) , another network bellwether, drove the point home last month when it warned of weakness in its fiscal first quarter and fiscal 2002 amid slashed budgets for optical communications gear. HOPE SEEN FOR CORPORATE SALES The world's largest networking equipment maker, Cisco Systems Inc. (Nasdaq:CSCO - news), gave stocks a lift last week when Chief Executive John Chambers said December orders were expected to meet expectations, and that customer budgets, while conservative, could increase. But Cisco sells to both telecommunications carriers and corporations, insulating it from some of the sharper dips caused by the telecommunications downturn. Analysts are hopeful ``enterprise'' network gear makers, which specialize in equipment for large organizations such as corporations, would be better positioned to tell the story of recovering sales. ``The enterprise market is the market showing the most stability -- to the extent there is stability,'' said Erik Suppiger of Pacific Growth Equities. ``Pricing is stable.'' One of the companies analysts are watching is Extreme, which last week said it expects to meet analysts' earnings estimates for its fiscal second quarter. The company will report the quarter's results on Wednesday. Santa Clara, California-based Extreme has said it expects earnings excluding charges of 1 cent to 2 cents a share and sees $108 million to $110 million in revenue for the three months ended Dec. 31. Analysts on average expect revenue of $109.9 million and earnings of 1 cent a share excluding goodwill, versus earnings of 11 cents a share in the same quarter a year ago, according to First Call. ``While forward visibility is still uncertain given the macro-economic environment, we are optimistic that the worst of the industry downturn is now behind us,'' Extreme Chief Executive Gordon Stitt last week said in a statement. dailynews.yahoo.com