Juniper Networks gave a forecast for third-quarter revenue and profit that fell short of analysts' estimates amid a slowdown in sales of networking equipment to phone companies.
Sales in the current period will be $1.15 billion to $1.2 billion, the company said Tuesday in a statement. On average, analysts projected sales of $1.26 billion, according to data compiled by Bloomberg. Profit excluding some costs will be 35 cents to 40 cents a share, compared with an average analyst estimate for 44 cents.
Juniper is facing lower spending by telecommunications carriers, and has struggled to sell smaller gear to corporations, a market dominated by Cisco Systems. The disappointing forecast is a blow to Chief Executive Officer Shaygan Kheradpir, who took over in January and a month later unveiled a restructuring plan amid pressure from activist investors.
"Missing your numbers when you've made big promises is not a good thing," said Alex Henderson, an analyst at Needham & Co. who recommends holding the shares.
Juniper shares fell as much as 13 percent in extended trading to $21.54. Before the report, they rose 1.5 percent to $24.82 at the close in New York. The stock has climbed 10 percent this year.
In the second quarter, revenue rose 6.8 percent to $1.23 billion, while profit before certain costs was 40 cents a share, Juniper said. On average, analysts projected sales of $1.22 billion and profit of 38 cents.
Including charges for restructuring steps and other items and a gain from a legal settlement, second-quarter net income rose to $221.1 million, or 46 cents a share, from $97.9 million, or 19 cents, a year earlier, Juniper said.
The company also initiated a quarterly dividend of 10 cents a share, its first such payout. The dividend will be payable on Sept. 23 to shareholders of record as of Sept. 2.
Kheradpir came under pressure from activist hedge funds Elliott Management and Jana Partners days after he took the helm of the Sunnyvale-based company. In February, the company said it would cut $160 million in expenses and return at least $3 billion to investors through stock buybacks and dividends. On April 2, Juniper said in a filing that it would eliminate 6 percent of its workforce, or about 570 jobs.
As part of Kheradpir's strategy to pare Juniper's product line, Tuesday the company said it reached an agreement to sell its Junos Pulse unit, whose products helped Juniper gear work directly with smartphones, for about $250 million to private- equity firm Siris Capital.