Juniper Networks Inc. dropped the most in more than two years after it said weakness in the overall economy is affecting performance and that most sales for the quarter will come toward the end of the period.
Sales so far in the three months ending June 30 indicate a “back-end loaded quarter,” said Kevin Johnson, chief executive officer of the second-largest maker of computer networking equipment, who spoke at the Bank of America Merrill Lynch U.S. Technology Conference in New York.
“There is reason to be somewhat cautious, but yet maintain optimism about the long-term growth models that we’ve outlined and the demand for networking long-term,” he said.
Investors reacted to the comments because they could imply the company, which typically gets about half its sales in the last month of the quarter, may be lagging behind its financial targets, Michael Genovese, an analyst at MKM Partners LP in Greenwich, Connecticut said. Juniper, which competes with larger rival Cisco Systems Inc., may need a better June that normal, Genovese said.
“If they don’t have a good June, they are going to miss,” said Genovese, who recommends buying the shares.
Juniper, based in Sunnyvale, California, tumbled $3.64, or 10 percent, to $32.97 at 4:15 p.m. New York time in Nasdaq Stock Market trading. It was the company’s steepest fall since January 30, 2009, according to Bloomberg data. The shares have fallen 11 percent this year.
Juniper’s decline also contributed to a drop for Ciena Corp., a Linthicum, Maryland-based maker of network gear for U.S. phone companies, Genovese said. Ciena fell $1.27, or 4.8 percent, to $25.48 in Nasdaq trading.