Japan quake to impact Juniper Q2 earnings

Juniper Networks has forecast some potential disruptionQ2 following the recent devastating events in Japan.

Juniper Networks has forecast some potential disruption Q2 following the recent devastating events in Japan.

Speaking on a conference call to mark the network infrastructure vendor's Q1 2011 results, CEO Kevin Johnson said the business saw a "very limited" impact from the tragedy during March, but added: "We believe a measure of caution is warranted as we monitor business conditions in the region.

"Over the past two years Japan has accounted for 5% to 8% of our revenue. We have a very solid enterprise business there ... we will continue to assess conditions carefully as we progress through the June quarter."

Added CFO Robyn Denholm: "There is some level of uncertainty in the demand environment over the next couple of quarters."

Denholm said she antipated a marked, albeit temporary, slowdown in the region, and said this would have an impact on EPS during the quarter, which are now expected to be between $0.31 and $0.34; analysts are currently calling for $0.36. 

For the three months to 31 March, Juniper made sales of $1.10bn (£673m), up 21% year-on-year and down 7% sequentially.

GAAP net income was $130m, down 20% on the year-ago period, as higher overall costs and tax provision trumped general growth in demand for its products.

"We are accustomed to typical investment patterns by our service provider customers that favour a stronger second half [and] we expect that pattern to continue this year," said Johnson. "Typically the first quarter is a period when service providers finalise their CAPEX budgets for the year."

Juniper said that despite some lingering recessionary weakness in EMEA, growth in the UK had been particularly strong.

Read more on Network Infrastructure Solutions and Services