Will Juniper Surprise Earnings Estimates?
Zacks Investment Research | Apr 21, 2015 01:31PM ET
Juniper Networks Inc. (NYSE:JNPR) is set to report first-quarter 2015 results on Apr 23. Last quarter, it posted a positive earnings surprise of 45%. 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 results in the to-be-reported quarter. Juniper’s expansion into the software defined network (SDN) segment is expected to strengthen its position in the networking space.
The increasing complexity in cloud infrastructure has increased the demand for SDN solutions which make the infrastructure more flexible and thereby lower costs. It is expected that the lower-cost proposition will lead to quicker adoption of the SDN technology and thereby boost growth for Juniper.
However, charges related to the company’s restructuring initiatives are expected to impact profitability in the first quarter. Competition from Cisco Systems Inc. (NASDAQ:CSCO) and F5 Networks (NASDAQ:FFIV) also remains a concern. Delays in large projects remain an overhang on the stock.
Earnings Whispers
Our proven model does not conclusively show that Juniper is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
Zacks ESP: Juniper has an Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents per share.
Zacks Rank: Juniper’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise predictions difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies which you may consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Apple Inc. (NASDAQ:AAPL), with an Earnings ESP of +2.79% and a Zacks Rank #2 (Buy).
Amazon.com Inc. (NASDAQ:AMZN), with an Earnings ESP of +175.00% and a Zacks Rank #3.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.