Shares of Juniper ( JNPR) surged in early trading Wednesday as investors looked beyond the networking company's weaker-than-expected first-quarter revenue forecast.

Like its archrival Cisco ( CSCO), Juniper has been feeling the effects of the tech spending slowdown, and blamed lower-than-expected sales to service providers for its first-quarter results.

The Sunnyvale, Calif.-based firm expects first-quarter revenue between $760 million and $765 million, well below the firm's initial guidance of $800 million to $830 million, and below analysts' estimate of $794.12 million.

Investors, however, were warming to Juniper Wednesday, and the company's shares rose $1.96, or 12.6%, to $17.58, most likely thanks to a solid earnings forecast. The networking gearmaker predicts first-quarter earnings in line with its previous estimates, which it attributes to recent cost-cutting efforts.

Excluding charges, Juniper expects earnings of 16 cents to 17 cents a share, within its previous guidance of 15 cents to 17 cents and in line with analysts' estimate of 17 cents a share.

The last few months have been busy for Juniper, which has beefed up its product line in an attempt to combat the spending slump. The company has ramped up its efforts around video and mobile technology, and unveiled its EX2500 line of high-speed 10-Gbit/s Ethernet switches. Last month, Juniper also extended its partnership with Nokia Siemens Networks to sell routers and switches to telecom companies.

"Despite the economic slowdown, Juniper remains focused on its strategic priorities, making prudent investments and introducing new products to enhance its market position," wrote Jefferies & Company analyst William Choi, in a note released Wednesday.

However, the analyst warns that there are still plenty of challenges in Juniper's path.

"We believe visibility remains poor on wireline service providers' spending," he wrote. "These carriers are cutting 2009 Capex budgets and approving major equipment spending on a 'just-in-time' basis."

Choi maintained his Hold rating and $15 price target for Juniper, which reports its first-quarter results April 23.

With demand for wireless services increasing, wireline continues to weigh heavily on telecom sector revenue. Telecom giant Verizon ( VZ), for example, saw its wireline revenue slip 2.7% during its recent fourth-quarter results, and rival AT&T's ( T) wireline operation has also taken a pounding.

Juniper is not the only networking company predicting a quarterly sales shortfall. F5 Networks announced its preliminary second-quarter results late Wednesday and expects revenue of $154.1 million, below its guidance of $157 million to $164 million, and just below analysts' estimate of $157.12 million.

Like Juniper, however, F5's earnings tell a different story, and the company expects earnings of 23 cents to 24 cents a share, exceeding its initial guidance of 19 cents to 21 cents a share. Excluding charges, F5 forecast earnings of 37 cents to 38 cents a share, in line with its previous estimate of 36 cents to 38 cents a share. Analysts had estimated earnings of 36 cents a share.

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