Juniper Networks, Inc. (NYSE: JNPR)
Juniper Networks is having an incredibly rough day in the market today, and for good reason. The company recently offered a revision to their Q1 earnings and revenue forecast, and as you can imagine by the resulting movement in the market, the revision was not a positive one. Today, we’ll talk about the revised expectations for Q1, how the market is reacting to the news, and what we can expect to see from JNPR moving forward. So, let’s get right to it…
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JNPR Revises Q1 Expectations
As mentioned above, Juniper Networks is having an incredibly rough day in the market today as the result of the company’s announcement that it has revised Q1 earnings expectations for 2016. Unfortunately, the revisions were in the downward direction. Here’s what the company is projecting now:
- Top-Line Revenue – In terms of revenue, JNPR announced that it is expecting to generate between $1.09 billion and $1.1 billion in the first quarter. Unfortunately, this was well below previous expectations of revenue coming in between $1.15 billion and $1.19 billion. This also missed projections from analysts who were expecting to see the company generate revenue in the amount of $1.18 billion.
- Earnings Per Share – In terms of earnings per share, JNPR also reduced expectations. Previously, the company forecast was that earnings would likely come in between $0.42 and $0.46 per share. Unfortunately, Juniper Networks announced that it is now expecting for earnings to come in between $0.35 and $0.37 per share. This is also in sharp contrast with what analysts expect with regard to earnings. Analysts expected that the company would generate earnings in the amount of $0.45 per share.
How The Market Reacted To The News
As investors, one of the first lessons we learn about the market is that the news tends to cause price movement. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with that company. Adversely, any time there is negative news released with regard to a publicly-traded company, we can expect to see declines in the value of the stock associated with the company. As you can tell from the information above, the news released with regard to JNPR was overwhelmingly negative news. As such, we’re seeing a strong negative reaction in the market today. Currently (10:45), JNPR is trading at $22.54 per share after a loss of $2.35 per share or 9.44% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see from JNPR. In the short term, things aren’t looking great. Investors are ultimately putting their money into assets for growth. The news that Juniper Networks is expecting lower revenue and lower earnings isn’t likely to sit well with investors. So, in the short run, I’m expecting to see further declines. However, in the long run, JNPR has positioned itself well within the industry. The poor earnings report that is soon to come is nothing more than a hurdle that I’m sure the company will make it over. In the long run, my opinion on JNPR is still relatively bullish.
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What Do You Think?
Where do you think JNPR is headed moving forward and why? Let us know your opinion in the comments below!
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