Juniper's rough quarter may indicate trouble for Cisco too

Analysts are saying Juniper is experiencing a rough Q1. Oppenheimer says channel checks indicate a rocky quarter for the company's enterprise business.

Now Lazard Capital Markets and UBS have chimed in with lowered expectations for Juniper's Q1 -- providing more hints that Cisco's fiscal Q3 may be tracking lower as well.

In a bulletin previewing the quarter, Lazard estimates Juniper's Q1 revenue to come in at $775 million, down from previous estimates of $810 million, and a 6% decline from last year. It's also well below company guidance of $800 million to $830 million. Lazard attributes this to softening in both the carrier and enterprise facets of Juniper's business:

We have heard more instances of pushouts and deal cancellations in recent weeks. Most notably, we believe that a large deal with Comcast, originally slated to be roughly $90 million in the quarter, has been cut to ~$20 million. Checks also indicate that business with AT&T and Verizon is tracking roughly in line, and that Google continues to be a no-show.

Lazards now expects Juniper's full year revenue to come in at $3.18 billion, vs. previous estimates of $3.35 billion, representing an 11% decline from 2008. The firm also believes that revenue in both of Juniper's main product groups -- Service Layer Technologies and the Infrastructure Products Group -- are down about 15% for the year. 

UBS has lowered its Q1 revenue expectations for the company to $777 million from $806 million. The firm believes sales could range from $740 million to $800 million for the quarter.

UBS says Juniper is challenged globally in enterprise, and in Europe in both enterprise and service provider. Lower than expected spending is the culprit:

While telcos have generally guided 2009 capex down 10-15% y/y, our checks show 1Q09 spending is down ~20% y/y. We also believe Enterprises have started this year spending slowly on their IT budgets.

Nonetheless, UBS expects a stronger second half for Juniper given that telco orders for delivery post-1Q "remain generally good." But data points from contract manufacturers and chip suppliers suggest a tough Q1 for all networking companies, according to UBS.

More from Cisco Subnet:

Cisco picks partners for next-gen data center assaultDow Jones Industrial Average: Cisco may have the right stuffAre Wireless Certifications Right For You?Cisco cert lab prep: Sim vs Em vs RealCisco taking share from Nortel?IT in 2109: Living Quantum Computers, Mind Reading PCs, and DNA nanofiber CPUsWendell Odom's OSPF training series

Go to Cisco Subnet for more Cisco news, blogs, discussion forums, security alerts, training/book giveaways, and more. Subscribe to the Cisco Alert newsletter. Follow Cisco Subnet on Twitter. 

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.
Related:
Now read: Getting grounded in IoT