Juniper Networks stock slammed on guidance

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    SAN JOSE, Calif. (AP) ? Juniper Networks Inc. was slammed with a 17 percent hit to its stock price Tuesday after the maker of computer networking gear forecast a lackluster third quarter driven by “near-term market weakness.”

    The punishment reflected fears that the Sunnyvale-based company isn’t performing as strongly against bigger rival Cisco Systems Inc. as many analysts expected, and that sluggishness in spending by Internet providers could be favoring other companies.

    Juniper’s stock fell $5.30 to $25.87 in extended trading after the company reported its second quarter results and the updated guidance. Cisco, meanwhile, fell 20 cents, or 1.2 percent, to $16.09, apparently reflecting investors’ view that Juniper’s problems aren’t affecting the rest of the industry as badly.

    The computer networking market has had a rough start to the year, with sluggishness in sales of some equipment caused by the strong growth the sector had in 2010, which has curbed Internet providers’ need for new equipment immediately.

    Those factors are part of the reason why Cisco, the world’s biggest networking equipment vendor, is going through a drastic restructuring, including the announcement earlier this month that it was cutting 6,500 of its 73,000 employees. Cisco has the added burden of being perceived as having grown too large and unfocused, a perception it’s trying to change with its job cuts and other actions, such as killing off its Flip video camcorder business.

    Juniper’s latest financials show that it has been hit hard by what it called “mixed signals in the macro economy.”

    Its second-quarter numbers fell slightly short of Wall Street’s targets. The third-quarter guidance was even more disappointing.

    In the second quarter, Juniper’s net income was $115.6 million, or 21 cents per share. That represents an 11 percent decline from the $130.5 million, or 24 cents per share, in the year-ago period.

    It earned 31 cents per share in the latest quarter excluding certain expenses. Analysts were expecting 34 cents per share, according to FactSet.

    Revenue rose 15 percent to $1.12 billion. Analysts expected $1.15 billion.

    For the third quarter, the company expects earnings of 26 cents to 30 cents per share, excluding items. Analysts expected 38 cents per share. It said revenue should be $1.07 billion to $1.12 billion. Analysts expected $1.22 billion.

    “We delivered solid year-over-year growth in the June quarter. However, we saw some moderation in certain areas of the business, which resulted in revenues coming in below our expectations,” Robyn Denholm, Juniper’s chief financial officer, said in a statement. “I’m pleased with our diligent expense control, which enabled us to generate earnings within our guidance range. We have taken decisive steps to ensure our cost structure takes into account the near-term revenue environment while preserving investments that support our multi-year growth agenda.”