Juniper Networks, Inc. JNPR is slated to report second-quarter 2020 results on Jul 28, after the closing bell. In the March-end quarter, the company posted negative earnings surprise of 8%. The bottom line missed the Zacks Consensus Estimate by 2 cents.

The Sunnyvale, CA-based network products and services provider is expected to have recorded lower aggregate revenues on a year-over-year basis. This is likely to have resulted from supply-chain issues due to the COVID-19 crisis and related macroeconomic situation as well as challenges at some of Juniper’s largest service provider customers. That said, the company is expected to have benefited from changes in its go-to-market structure to better align its sales strategies with each of the core customer verticals.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

During the quarter under review, Transports Vervaeke, a leading international chemical and fuel logistics provider, chose the Wireless LAN platform from Juniper’s Mist Systems to streamline network operations and improve employee productivity in its garages, warehouses and office locations across Europe. Also, Juniper partnered with T-Systems — one of the leading cross-manufacturer digital service providers — to deliver a managed SD-WAN infrastructure as part of a service overlay solution for companies with complex network and connectivity requirements.

Mist Systems launched several new solutions that assist enterprises as they welcome employees, customers and guests back onsite after stay-at-home restrictions are lifted. Further, Juniper’s Contrail Enterprise Multicloud was selected as the common services management platform by Net One Systems, one of Japan’s largest network integrators. Such developments are likely to have had a positive impact on the company’s top line.

The Zacks Consensus Estimate for revenues in the Product segment (comprising Routing, Switching and Security), which contributes for the lion’s share of total revenues, is pegged at $653 million. The projection indicates a decline of 8.5% from the year-ago quarter’s reported figure. Revenues in the Service segment are estimated at $396 million, which suggests an increase from $389 million reported in the year-ago quarter.

For the June-end quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,053 million that indicates a decline of 4.5% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 35 cents, which calls for a decline of 12.5% from the prior-year quarter’s recorded figure.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Juniper this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Juniper’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 35 cents.
 

Zacks Rank: Juniper currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Community Bank System, Inc. CBU is slated to release second-quarter 2020 results on Jul 27. It has an Earnings ESP of +26.47% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NXP Semiconductors N.V. NXPI is scheduled to release second-quarter 2020 results on Jul 27. The company has an Earnings ESP of +11.90% and a Zacks Rank #2, at present.

Lincoln Electric Holdings, Inc. LECO has an Earnings ESP of +5.50% and a Zacks Rank of 2. The company is set to report second-quarter 2020 results on Jul 27.

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