Signs of stabilization from Cisco channel, Juniper guidance

We may have hit bottom. Those are the signs coming from Cisco's channel and Juniper's Q2 guidance.

Customer spending and vendor revenue are showing signs of stabilization, according to updates from the Cisco channel provided to Oppenheimer & Co. analysts. In an April canvassing of 33 Cisco channel partners in the US and Europe, Oppenheimer found that 60% expect sales to grow next quarter, according to a bulletin released by the firm this week.

Growing pipeline activity along with the defrosting of budgets were reasons for the positive sentiment.

Cisco announces its fiscal Q3 results on May 6.

The optimism from the channel is backed by Oppenheimer's supply chain analysis, which shows sequential sales growth in June, according to the bulletin.

June expectations seem to call for sequential sales growth on average of 0-2%. While this isn't reflective of Cisco's absolute sales, the directional trend has been fairly accurate and is supportive of a bottom.

Oppenheimer is cautiously optimistic that Cisco can grow revenue 1% from FY Q3 to FY Q4, which ends in July.

Juniper, meanwhile, said during its Q1 conference call this week that it too is beginning to see signs of stabilization in customer spending and revenue expectations. The company said Q2 sales and earnings would be flat with Q1's.

"The environment is more stable than in early Q1," Juniper CEO Kevin Johnson said during the conference call, though adding that visibility remains limited.

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