Juniper Networks (NYSE:JNPR) shares dropped over 5% pre-market on Wednesday as provide chain points overshadowed the corporate’s Q2 outcomes and raised income outlook for the 12 months.
The networking merchandise firm generated adjusted EPS of $0.42 (a lower of $0.01 year-over-year) that missed Avenue’s estimates of $0.44. Earnings had been additionally beneath the mid-point of the corporate’s personal outlook vary primarily as a consequence of decrease than anticipated gross margin. Non-GAAP working margin of 13.9%, fell from 15.8% within the second quarter of 2021.
Internet revenues, in the meantime, grew 8.5% Y/Y to $1.27B and exceeded Avenue’s estimates. income by vertical, all verticals grew sequentially and on a year-over-year foundation, with enterprise up 15% Y/Y, service supplier +6% Y/Y and cloud enterprise +3% Y/Y.
Citing elevated order momentum, a robust backlog and improved provide, Juniper (JNPR) lifted its income outlook for the 12 months, anticipating progress of ~10%, up from its earlier steerage of seven% to 9%. Backlog is prone to stay at elevated ranges by way of the rest of 2022.
Nevertheless, in its CFO commentary, the corporate mentioned that it expects some stress to revenue and margins over the following a number of quarters and that “prolonged lead instances and elevated prices will possible persist for a minimum of the rest of the 12 months.”
Commenting on the identical, Jefferies analyst George Notter famous that, “Juniper is the newest provide chain sufferer and elements stay a limiting issue. EPS shortfall stems from weaker-than-expected gross margins, because of the provide chain atmosphere.”
Barclays additionally states that, “Larger provide chain prices and provider de-commits proceed to weigh on backside line regardless of higher income forecasts.”
