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Can Healthy Revenue Growth Aid Juniper's (JNPR) Q2 Earnings?

·4 min read

Juniper Networks, Inc. JNPR is scheduled to report second-quarter 2022 results on Jul 26, after the market closes. In the last reported quarter, the company missed adjusted earnings by a penny. It pulled off a trailing four-quarter earnings surprise of 3.2%, on average.

The Sunnyvale, CA-based network solutions provider is expected to have recorded year-over-year higher revenues, driven by strong sales across its AI- Driven Enterprise, Product and Service segments. It is also expected to have witnessed encouraging trends across various areas of business, such as Mist System and investments in customer solutions and sales organizations.

Factors at Play

Juniper is expected to have benefited from the launch of the EX4100 series of enterprise-grade wired access switches. These will deliver outstanding performance, ease, flexibility and security for all enterprise access layer switching. The Zacks Consensus Estimate for Hardware Maintenance and Professional Services is pegged at $386 million. The figure indicates a rise of 1.8% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for Automated Wan Solutions stands at $419 million. The figure indicates a rise of 5.8% from the year-ago quarter’s reported figure.

Juniper has also announced the innovation that will power its vision and strategy for Cloud Metro. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical coverage. It is offering a wide variety of products such as T4000 core router, QFX data center platform, ACX and PTX packet/optical solutions, among others. This will lead to sustainable business growth along with a series of high-performance networking systems, driven by AI-enabled and cloud delivered automation. The consensus estimate for AI-Driven Enterprise stands at $230 million, which implies an increase from $195 million reported a year ago.

During the quarter, the company inked a collaboration with Dragos to secure critical infrastructure from cyber-attacks and augment cybersecurity. The partnership will essentially offer an automation framework for active attack response. The consensus estimate for Enterprise segment stands at $446 million, which implies an increase from $408 million reported a year ago. The consensus estimate for Product stands at $806 million, which implies an increase from $759 million reported a year ago, while that for Service is $452 million, up from $413 million in the year-earlier quarter. Furthermore, the consensus estimate for Cloud-Ready Data Centers is up to $218 million from $202 million reported a year ago.

However, due to a worldwide shortage of semiconductors, Juniper is facing supply headwinds resulting in extended lead times and higher logistics and component costs. There are also looming concerns of an uncertain macro environment and weak investment patterns among carrier customers. One of the primary markets that Juniper services is Enterprise comprising large businesses — federal, state and local governments, and research and education institutions. Therefore, the company is widely affected by the stringent budget activities of the U.S. government.

For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,257 million, which indicates growth of 7.3% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at 45 cents, suggesting an increase of 4.7% year over year.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for JNPR this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Juniper’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +1.00%.

Juniper Networks, Inc. Price and EPS Surprise

Juniper Networks, Inc. Price and EPS Surprise
Juniper Networks, Inc. Price and EPS Surprise

Juniper Networks, Inc. price-eps-surprise | Juniper Networks, Inc. Quote

Zacks Rank: Juniper currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

PBF Energy Inc. PBF is slated to release second-quarter 2022 results on Jul 28. PBF Energy has an Earnings ESP of +20.67% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here

Range Resources Corporation RRC is scheduled to release second-quarter 2022 results on Jul 25. Range Resources has an Earnings ESP of +11.56% and a Zacks Rank #1.

Suncor Energy Inc. SU has an Earnings ESP of +2.69% and a Zacks Rank #1. Suncor Energy is set to report second-quarter 2022 results on Jul 27.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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