Juniper ‘Very Cautious’ About 2012 on Europe Debt Crisis

Juniper Networks Inc. (JNPR) Chief Executive Officer Kevin Johnson said Europe’s debt crisis may hamper expansion in Internet traffic, posing a “challenge” to the networking-equipment industry.

“We are approaching 2012 in a very cautious way,” Johnson said in an interview today at the Mobile World Congress in Barcelona, Spain. “The ongoing growth of Internet traffic continues to create demand, but there are clearly some macroeconomic factors that will create a challenge.”

Juniper fell 2.1 percent to $22.29 at the close in New York. The stock has gained 9.2 percent this year.

The sovereign-debt crisis is showing “there’s a bit of recessionary caution in Europe,” the CEO said.

Juniper, the second-largest maker of networking equipment, forecast first-quarter sales and profit in January that missed analyst estimates, a sign that Internet providers are limiting spending amid sluggish economic growth. Revenue gains this year will come from Asia, which accounts for about 20 percent of Sunnyvale, California-based Juniper’s sales, Johnson said today.

Verizon, Deutsche Telekom

Juniper ranks second to Cisco Systems Inc. (CSCO) in the networking-equipment industry, and its customers include AT&T Inc. (T), Verizon Communications Inc. (VZ) and Deutsche Telekom AG. (DTE) Even as consumers flock to mobile devices like Apple Inc. (AAPL)’s iPhone and tablet computers, network upgrades may lag behind because they can take years to plan and cost billions of dollars.

Photographer: Andrew Harrer/Bloomberg

Kevin Johnson, chief executive officer of Juniper Networks Inc. Close

Kevin Johnson, chief executive officer of Juniper Networks Inc.

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Photographer: Andrew Harrer/Bloomberg

Kevin Johnson, chief executive officer of Juniper Networks Inc.

Juniper, which gets 64 percent of revenue from service providers and 36 percent from enterprise customers, needs to see “how the year plays out” in terms of orders, Johnson said.

“Emerging markets have a potential to grow faster,” as telecommunications and Internet providers in those countries expand third-generation and even faster networks based on the so-called long-term evolution standard, Johnson said. “China, India and Africa will grow faster than more developed markets.”

To contact the reporter on this story: Manuel Baigorri in Barcelona at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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