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Juniper (JNPR) to Report Q4 Earnings: Will it Beat or Miss?

Zacks Equity Research
Updated

Juniper Networks, Inc. JNPR is set to report fourth-quarter 2015 results on Jan 27. Last quarter, the company posted a positive earnings surprise of 11.63%. Notably, the company has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters bringing the average positive surprise to 22.22%.

Let us see how things are shaping up for this announcement.

Factors to Consider

Juniper is capitalizing on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Moreover, the company’s product launches, cost reduction initiatives and improving execution should aid fourth-quarter results.

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Juniper’s expansion into the software defined network (SDN) segment is likely to strengthen its position in the networking space. The increasing complexity in cloud infrastructure has raised the demand for SDN solutions which make the infrastructure more flexible and lower costs. It is expected that the low-cost proposition will lead to quicker adoption of the SDN technology, in turn, boosting growth for the company.

However, charges related to Juniper’s restructuring initiatives are expected to impact profitability in the fourth quarter. Competition from Cisco CSCO and F5 Networks, and delays in large projects remain the other concerns.

Earnings Whispers

Our proven model does not conclusively show that Juniper will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 49 cents. Hence, the difference is 0.00%.

Zacks Rank: Juniper currently has a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are a couple of stocks which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

MicroStrategy Inc. MSTR, with an Earnings ESP of +3.46% and a Zacks Rank #1.

Facebook Inc. FB, with an Earnings ESP of +2.00% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
 
JUNIPER NETWRKS (JNPR): Free Stock Analysis Report
 
MICROSTRATEGY (MSTR): Free Stock Analysis Report
 
FACEBOOK INC-A (FB): Free Stock Analysis Report
 
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Zacks Investment Research