Juniper's Last Stand JNPR, KLAC, OPWV, CNET, CMVT, VTSS
The market has hammered Juniper Networks so hard over the last year that when the company announced the the U.S. Attorney was looking at its stock options grants the price of the company's shares actually rose. Juniper now joins a small but growing legion of companies including KLA-Tencor (KLAC), Openwave (OPWV), CNet (CNET), Comverse (CMVT), Vitesse (VTSS) and others being asked similar questions by the government about the timing of their option grants.
Juniper's stock was up almost 2.9% on the day to $15.49. The company dropped below it former 52-week low earlier in the session, touching $14.62. The high for the period was $27.65. The company's market cap has been cut nearly in half in the last year and is now down to $8.8 billion, or 3.9 times sales.
After several years of impressive growth, the most recent quarter was a disappointment. Revenue fell to $566.7 million in the March 31, 2006 quarter from $575.5 million in the December 31, 2005 period. Operating income shrank more to $90.9 million from $116.4 million.
Juniper, the maker of scalable router products, still has its fans. According to Forbes, "Piper Jaffray analyst Troy Jensen maintained an "outperform" rating on Juniper Networks, saying he expects the company to continue to benefit longer-term from deployments of next-generation IP services that require high bandwidth". But, guidance for the next quarter was poor. Revenue was originally slated for $580 to $590 million. The company dropped that to a $560 to $570 range. Apparently a delay in a contract with Verizon (VZ) caused part of the anticipated miss.
Call it perverse, but perhaps when a stock does not have a negative reaction to the announcement of a government investigation, it has fallen too low. Even with the lowered guidance the company is very likely to do better than the $493 million top line in the June quarter last year.
Maybe now, Juniper's stock price is too low.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at douglasamcintyre@gmail.com.
Juniper's stock was up almost 2.9% on the day to $15.49. The company dropped below it former 52-week low earlier in the session, touching $14.62. The high for the period was $27.65. The company's market cap has been cut nearly in half in the last year and is now down to $8.8 billion, or 3.9 times sales.
After several years of impressive growth, the most recent quarter was a disappointment. Revenue fell to $566.7 million in the March 31, 2006 quarter from $575.5 million in the December 31, 2005 period. Operating income shrank more to $90.9 million from $116.4 million.
Juniper, the maker of scalable router products, still has its fans. According to Forbes, "Piper Jaffray analyst Troy Jensen maintained an "outperform" rating on Juniper Networks, saying he expects the company to continue to benefit longer-term from deployments of next-generation IP services that require high bandwidth". But, guidance for the next quarter was poor. Revenue was originally slated for $580 to $590 million. The company dropped that to a $560 to $570 range. Apparently a delay in a contract with Verizon (VZ) caused part of the anticipated miss.
Call it perverse, but perhaps when a stock does not have a negative reaction to the announcement of a government investigation, it has fallen too low. Even with the lowered guidance the company is very likely to do better than the $493 million top line in the June quarter last year.
Maybe now, Juniper's stock price is too low.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at douglasamcintyre@gmail.com.
posted by douglas mcintyre at 6:52 PM
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