Juniper’s Q2 Earnings: How The Company’s Retaliating Against The Industry Weakness

July 27th, 2016 by Trefis Team
-7.47%
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JNPR: Juniper Networks logo
JNPR
Juniper Networks

Juniper’s stock ticked down a little in after hours trading following the release of its Q2 results, which though better than expected, were overshadowed by a bleak guidance for the third quarter. The company expects its revenues to tick up only marginally in the September period, driven by its strength in network services, cloud computing, SDN (software defined networking) and NFV (network functions virtualization). This strength will be partially offset, however,  by the prevailing economic uncertainty that is forcing service providers to keep a check on their capital spending.

Listing key wins, Juniper mentioned that Verizon has recently selected its cloud CPE solution for virtual network services, Orange Business Services is using its Contrail SDN controller for network as a service and AT&T is using its virtual routing function. On the hardware front, Juniper reported improved traction for its newer routers series MX and PTX. The company even believes that it can make the most of the customer migration from 10 gigabit Ethernet to 100 gigabit Ethernet by leveraging its strengths in the edge and core routing domains.

While Juniper is striving hard to stay ahead on the innovation curve to respond to the change in industry dynamics and customer requirements, intense competition from Cisco and white-label hardware companies, as well as sluggishness in carrier capital spending, are giving Juniper’s topline a tough time. However, with new product launches, better software sales and cost-reduction initiatives, the networking company may be able to boost its profitability going forward.

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JNPR Q2 earnings

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Notes:

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