The Juniper & Riverbed Tails Wagging The Cisco Dog (JNPR, CSCO, RVBD)

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Juniper Networks, Inc. (NYSE: JNPR) is often considered the baby versions of Cisco Systems, Inc. (NASDAQ: CSCO).  That characterisation may not be fair, but that is another story.  Investors and traders treat these often on an interchangeable basis. Then you have to throw in the situation at Riverbed Technology, Inc. (NASDAQ: RVBD) on its earnings report.

Riverbed Technology, Inc. (NASDAQ: RVBD) is getting hit very hard, perhaps even too hard, after its 53% profit gains beat expectations and revenue met estimates more or less.  The problem is that the company’s guidance for the quarter ahead remains challenging.  Riverbed was up 1.2% at $29.92 today but now the stock is down almost 13% in the after-hours session to $26.00 per share in active trading.

So, as far as Juniper is concerned, its non-GAAP profit fell to $0.28 EPS from $0.35 a year earlier while revenue fell to $1.12 billion from $1.19 billion a year earlier.  Those were more or less in-line with estimates, but the company talked about the current quarter being a challenging one and it cut sales expectations to $960 to $990 million versus a target of about $1.1 billion.  That is just heading very much in the wrong direction no matter how you cut it.  Juniper closed down 1% today and the after-hours earnings reaction has shares down almost 8% at $20.60 in active after-hours trading.

There is an old saying that a tail cannot wag the dog.  Unfortunately that is not proving to be the case this evening.  Cisco Systems, Inc. (NASDAQ: CSCO) is the king of the networking space and its shares are down 1% at $19.62 in the after-hours after closing flat at $19.83.  Cisco is in a turnaround and it is believed by many that Cisco is trying to win back much of its lost business in a leaner operating structure.  We’ll know in the coming weeks if that is true or not.

Stay tuned.

JON C. OGG

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