Lucent is first up with a before-the-bell report. Analysts expect the Murray Hill, N.J., telecom gearmaker to show it is still treading water, with sales stuck at the same level they've been at for the past two quarters. Meanwhile, Wall Street is looking for yet another blowout performance from Juniper when the tech shop reports after the market's close.
The disparity between the two gearmakers has everything to do with where phone companies are sinking cash from their equipment budgets -- and, in Lucent's case, where they aren't. Juniper sells big routers at a time when phone companies are expanding their Internet capacity to keep up with Net calling traffic and video-over-the-Internet efforts.
Big spending on Net gear is expected to continue boosting Juniper's performance, just as expansion in wireless has certainly been a benefit to Lucent. But there's more to Lucent's story than wireless.
Some analysts caution that Lucent's slow progress actually traces a narrow line between declining sales of old-line phone switches and surging orders for wireless and Internet gear.
Slight changes in phone company buying patterns could pose a risk for Lucent, says J.P. Morgan Chase analyst Ehud Gelblum.
If telcos shift spending more quickly to next-generation equipment, at the expense of traditional gear, "Lucent's top line and margins could come under significant pressure," Gelblum says in a research note. Gelblum has a neutral rating on Lucent and Juniper.
For Juniper, the spending trends could hardly be more favorable.
The growth of broadband Internet connections has pushed up demand for big routers, the network junction boxes used by telcos to manage data traffic. And increasing security concerns have helped bump up orders for network protection gear, says Merrill Lynch analyst Tal Liani, who rates Juniper a buy and Lucent hold.
"We believe that the underlying trends in the service provider routing market are still strong," Liani writes in a recent preview report on Juniper.
Analysts are looking for Juniper to post earnings of 17 cents a share on $475 million in sales for the quarter ended in June. On guidance for the current quarter ending in September, analysts expect the company to forecast 4% sequential top line growth for sales of $496 million, according to Thomson First Call.
For Lucent, Wall Street expects a 4-cent-a-share profit on sales of $2.36 billion. Looking ahead, analysts see Lucent guiding to 4% sequential sales growth in the quarter ending in September.