Awaiting the Juice at Juniper

The gearmaker looks to gin up growth for impatient investors.
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Juniper (JNPR) - Get Report is set to deliver another target-beating quarter, but investors are bracing for signs of a slowdown ahead.

With its impressive three-year streak of beating expectations on the line, Juniper will deliver fourth-quarter numbers after the market's close Wednesday. But the real anxiety for the Street seems to center on Juniper's forecast for the year ahead.

The Sunnyvale, Calif., networking gear maker has enjoyed fantastic growth as one of two top suppliers of Internet infrastructure to phone companies. But spending trends are shifting. The demand for huge traffic management boxes or core routers made by Juniper and rival

Cisco

(CSCO) - Get Report

is expected to slacken as the telcos' upgrading efforts move more toward the edge or access points of the network.

Though the pace and intensity of this product shift are hard to predict, many industry observers say Juniper's biggest growth days may be in the rearview mirror.

"We are concerned that the company's hyper-growth phase could be moderating as we head into the back half of the year," JPMorgan Chase analyst Ehud Gelblum says in a research note. Gelblum has a neutral rating on the stock.

Juniper's attempts to enter new markets like office network security and cable system hardware have not encountered any obvious successes yet. And though Juniper has a hearty edge router business, competitors like

Alcatel

(ALA)

have been

gaining market share with less-pricey equipment.

Juniper's shares are down 21% from their high in June on concerns about looming growth challenges. The pressure to find new opportunities has helped revive

merger speculation this month, with potential suitors like wireless giant

Motorola

(MOT)

mentioned.

Still, Juniper isn't exactly in the sour spot. Internet gear makers are expected to benefit from an Internet protocol television boom and a growing need among telcos to prioritize data pathways as they

look to play traffic cop.

For the fourth quarter, analysts expect Juniper to post adjusted net income of 20 cents a share on sales of $578 million. Looking ahead to the first quarter ending in March, analysts expect earnings to be flat with the prior period at 20 cents a share, on revenue of $586 million, or about 1% sequential growth despite a seasonally weak quarter.

Juniper shares closed up 16 cents to $21.35 Tuesday.