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Cloud service providers have been reining in spending on infrastructure equipment as uncertainty hovers around the U.S. economy despite a recent waning in inflationary pressures, hitting companies like Juniper.
Chief executive Rami Rahim flagged that the group faces “near-term order weakness” from its cloud clients, as well as its service provider customers.
In a note to clients following the release of Juniper’s second quarter results, analysts at Morgan Stanley said: “[C]loud customers further pulled back on orders (for the second quarter in a row), as they digest inventory and redirect capex towards [artificial intelligence] projects.”
California-based Juniper said it now anticipates that revenue will come in at around $1.38 billion in the third quarter, below average analyst estimates of $1.48B. The firm’s outlook for adjusted earnings per share of $0.54 also missed projections of $0.62.
However, net revenue in the three months ended June 30 increased to $1.43B, topping expectations of $1.42B, which the Morgan Stanley analysts said was linked to a quicker-than-anticipated backlog release.
