Analyzing

Cisco Systems, Inc. (CSCO), Alcatel Lucent SA (ADR) (ALU), Juniper Networks, Inc. (JNPR): Analyzing Networking Companies’ Mostly Lackluster Earnings

Page 1 of 2

Networking has been having a tough time. 2012 was just an awful year, and 2013 was off to a slow start. I took my time writing an earnings article, because I wanted to wait for Cisco Systems, Inc. (NASDAQ:CSCO) to join the bunch and give it some thought. As far as initiatives go, Alcatel Lucent SA (ADR) (NYSE:ALU) needs to do more if it plans on returning to profitability. Juniper Networks, Inc. (NYSE:JNPR) needs to do more about growth, but it is in a steady position and does not need severe expense-cutting.

Cisco Systems, Inc. (NASDAQ:CSCO)

Less coddling, more cutting

I was disappointed by Alcatel Lucent SA (ADR) (NYSE:ALU)’s recent earnings, because the expense reductions were in the millions. The company wants to cut 1.25 billion euro by the end of 2013, and if this quarter just had about 100 million euro in cuts. I suppose it is almost one-twelfth of the way there, but it is prudent to take a “wallet half empty” approach.

The company cannot hope to reach its goal if it uses kid gloves. More aggressive cuts are needed, and hopefully, Q2 will show far larger cuts. The reason for this is that the company should be early in its expense-cutting. It cannot all be hard cuts that need constant thought. The company would not be in this situation if it was not bloated with things that could be easily lopped off.

Before declaring absolute Armageddon, the first quarter of 2013 was the last quarter for CEO Ben Verwaayen. At the start of the second quarter, Michel Combes took over. It could be that the first quarter was not as aggressive because the CEO was just focused on wrapping up anything already started instead of taking on new things. That allows Combes to start with as clean a slate as possible. Apparently, Combes does have a history of effective belt-tightening. There is no time for a learning curve, since the first quarter showed little progress.

Make more money, simple

Juniper’s earnings were met with some sadness as revenue missed by $10 million. It might just be that financial news sites were looking for something to report that explained Juniper Networks, Inc. (NYSE:JNPR)’s drop. There are very real concerns about revenue growth at Juniper, and it could be that revenue being seen as flat was actually the cause of the drop.

I went through Juniper Networks, Inc. (NYSE:JNPR)’s products online trying to find out if there was anything that would really set the company on the path to continual and regular revenue growth. A lot of the products I looked at formed alternative to other Juniper products. Price and volume might make revenue rise a little, but overall, it is diversity within a similar line of products. It might win over a few customers, but it will not increase what your current customers buy. Juniper Networks, Inc. (NYSE:JNPR) might be at the point that it needs other offerings that fit around its current products as a way to increase revenue. Cisco Systems, Inc. (NASDAQ:CSCO) had to do the same thing once it hit a certain point.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!