Juniper Light on Sales

The stock sinks 6%.
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Updated from 4:31 p.m.

Juniper

(JNPR) - Get Report

sank 6% late Wednesday after the networking-gear company missed its first-quarter sales target and cut second-quarter guidance.

The Sunnyvale, Calif., company made $75.8 million, or 13 cents a share, for the quarter ended March 31, compared with $75.4 million, or 13 cents a share, a year earlier. Excluding certain costs, latest-quarter earnings were 19 cents a share on a pro forma basis, matching the Thomson Financial analyst consensus estimate.

Sales rose 26% from a year ago to $566.7 million, missing the $571 million analyst estimate. Net cash flows from operations fell to $83 million from $134.4 million a year earlier, due in part to the movement of $56 million in latest-quarter tax benefits from the exercise of employee stock options into the cash flows from financing activities line under new accounting rules.

"The first quarter reflected the continuing acceptance of Juniper's product portfolio with both our enterprise and service-provider customers," said CEO Scott Kriens. "We will intensify our focus on execution in order to capitalize in an environment where our capabilities and the market requirements are aligning more clearly than ever before."

On the call, Juniper cut sales numbers for the current quarter and says it is now looking at a flat sequential revenue performance. Looking ahead, executives on a conference call with analysts Wednesday said revenue in the second quarter should fall in a range between $560 million and $570 million.

Those numbers are well below the $587 million analysts had been looking for, according to Reuters Research.

The Sunnyvale, Calif., networking gearmaker has seen continued sales weakness in Japan along with a slackening of demand for Internet routing equipment due to telco mergers in the U.S.

In his comments during the conference call, CEO Scott Kriens remained upbeat about Juniper's business prospects and noted an infrastructure deal recently struck with

Microsoft

(MSFT) - Get Report

to supply upgrades to the MSN network. Kriens did not provide a dollar value for the deal.

CFO Robert Dykes didn't provide any guidance beyond the current quarter on the conference call, but said that he expected growth would be "picking up in the second half," and specifically toward the "latter part of the year."

After rising 44 cents during regular action to $20.30, Juniper dropped $1.15 in late trading to $19.15.