Juniper Network’s stock falls as it warns of elevated supply costs

Shares of the laptop networking equipment provider Juniper Networks Inc. slipped extra than 5% currently following the firm warned investors it faces “elevated costs” this calendar year ensuing from ongoing provide chain difficulties.

The warning arrived just after a mixed report that observed Juniper pass up anticipations on earnings.

The company reported very first-quarter earnings right before specific expenditures these types of as inventory compensation of 31 cents for each share on profits of $1.17 billion, up 9% from a year ago. Internet revenue for the period arrived to $55.7 million, contrasting with a $31.1 million loss 1 year back.

Wall Road experienced been wanting for Juniper to report earnings of 32 cents for each share on a little bit reduce income of $1.16 billion. Buyers had been clearly on the lookout for much better news, though, as Juniper’s inventory dropped virtually 6% of its worth in the extended trading session, obtaining already slipped 3% before in the working day.

Juniper sells computer system networking hardware such as routers and Ethernet switches. It is also a leader in the community software small business and gives many stability tools as well.

Juniper Chief Executive Rami Rahim (pictured) tried out to set a brave facial area on, telling traders in a statement that the company’s small business momentum exceeded anticipations through the quarter with “solid double-digit order growth” across all purchaser vertical industries.

“While some of this power speaks to the overall health of our marketplaces, a great deal of this demand from customers can be attributed to robust execution across our product or service management, engineering and go-to-market place organizations,” Rahim stated. “We believe that the technological differentiation of our consumer remedies must placement us to advantage from the a variety of sector tailwinds that are likely to increase need for community infrastructure in the years to appear.”

What truly set the cat amid the pigeons, nevertheless, was Juniper’s warning of the difficulties it is anticipating owing to ongoing supply chain disruptions. “Similar to other folks, we are going through ongoing supply-chain troubles, which have resulted in extended guide moments, as effectively as elevated logistics and part costs,” the firm said in a statement.

Juniper therefore issued cautious guidance for the future three months. The firm stated it expects second-quarter earnings in a array of 40 to 50 cents per share, the midpoint of which is just below Wall Street’s forecast of 46 cents for each share. For revenue, Juniper is forecasting concerning $1.21 billion and $1.31 billion, which is more or considerably less in line with Wall Street’s predicted $1.25 billion.

Even though buyers gave Juniper shorter shrift, analysts experienced a far more measured opinion of the company’s overall performance and prospects. Holger Mueller of Constellation Study Inc. told SiliconANGLE that the organization showed excellent execution to hit its guidance in the quarter just gone. “It was a exceptional feat given the issues the networking industry has confronted with regards to semiconductors and total source chains,” Mueller claimed.

Hunting in advance, Mueller claimed Juniper will after again be tricky-pressed to fulfill its advice, but he did not rule it out. “Juniper has established the common for the relaxation of the business in conditions of expense discipline and its means to produce on its targets,” the analyst ongoing. “If there is 1 point not to like, it’s that the enterprise has somewhat diminished its R&D expense, most possible to compensate for the increased charges.”

Photograph: SiliconANGLE

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