Juniper Networks, Inc. (JNPR) is set to report third-quarter fiscal 2014 results on Oct 23. Last quarter, it posted a negative surprise of 3.6%. Let us see how things are shaping up for this announcement.
Factors to Consider This Past Quarter
Juniper posted modest second-quarter 2014 results. Year-over-year revenue comparison was favorable buoyed by higher product revenues and services revenues.
Additionally, the company’s expansion into the software defined networking segment is expected to strengthen its position in the networking space. Moreover, increased spending by service providers such as AT&T (T) and Verizon (VZ) should also support the company’s near-term fundamentals.
We also remain encouraged by the company’s product launches, cost reduction initiatives and improved execution. However, charges related to the company’s restructuring initiatives are expected to impact near-term profitability. Competition from Cisco (CSCO) and F5 Networks also remains a concern.
Also, weaker-than-expected demand primarily from the U.S. service providers had compelled the company to lower its revenue and earnings forecast for the third quarter. Juniper expects revenues to come within the $1.11billion and $1.12 billion range versus the previous expectation of $1.15 billion to $1.20 billion set forth during its second-quarter conference call.
The company expects its third-quarter non-GAAP earnings per share to be in the range of 34 cents to 36 cents, lower than the company’s previous guidance of 35 cents to 40 cents.
Earnings Whispers?
Our proven model does not conclusively show that Juniper is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
Zacks ESP: Juniper’s ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 26 cents per share.
Zacks Rank #5 (Strong Sell): We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
OtherStocks to Consider
Here are a couple of other companies, which you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Facebook, Inc. (FB), with Earnings ESP of +6.25% and a Zacks Rank #2 (Buy)
Allegheny Technologies Inc. (ATI), with Earnings ESP of +40.00% and a Zacks Rank #3 (Hold)
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