Juniper said results for the quarter ended Dec. 31, are now expected to be below the company’s outlook issued on Oct. 24. Revenue is now expected to be in the range of $1.11 billion to $1.12 billion, compared to the company’s prior expectation of $1.16 billion to $1.22 billion.
The company said earnings, excluding expenses, charges and other items, is now expected to be in the range of $0.26 to $0.28 per diluted share, compared to the company’s prior expectation of $0.32 to $0.36. Operating margin is also expected to be below the company’s prior outlook of 21% to 23% due to lower than expected gross margins, which were impacted by reduced revenue.
The lowered forecast is primarily due to weaker than expected router demand from service providers, the company said. A “significant portion” of the impact was from U.S. service providers, Juniper said.
“2011 was a record year of revenue for Juniper, even though our fourth quarter revenue was weaker than expected due to service provider demand,” said Juniper CEO Kevin Johnson, in a statement.
Some analysts were expecting turbulence in Juniper’s service provider business in Q4 and beyond, despite its enterprise sales coming in on plan.
Demand may have been impacted by three new Juniper products hitting the shelves this year: the T4000 core router, the PTX packet/optical transport system, and the MobileNext enhanced packet core for mobile operators. Service providers are believed to be delaying purchases while they evaluate these new products, which are expected to ramp up in the second half of 2012.
The company releases its financial results for Q4 on Jan. 26.