Networking expert Juniper Networks (NASDAQ:JNPR) reports earnings on Wednesday night. Grab a gin and tonic -- it's time to get coniferous!

What analysts say:

  • Buy, sell, or waffle? Twenty-eight Wall Street firms cover Juniper. Their recommendations are split between 12 "buys," 15 "hold" ratings, and one lonesome seller. In our Motley Fool CAPS database, this is a two-star stock based on input from 220 investors like us.

  • Revenues. Management guidance says $640 million to $650 million, and the analyst average is clinging to the very top of that range. $650 million would be 14.5% better than the year-ago period's $567.5 million.

  • Earnings. Once again, the Street consensus falls in lockstep with guidance, at $0.20 per share. That's a penny per share better than last year's result.

What management says:
The latest earnings report was characterized by understated confidence, as the results were in line with CEO Scott Kriens' expectations. He pointed to "solid opportunity" moving forward, and promised to "remain focused" on customer needs and sharper execution. If Cisco (NASDAQ:CSCO) or perhaps Nortel Networks (NYSE:NT) were to play the hare, Juniper would make a perfect slow-and-steady tortoise.

What management does:
There's a bit of margin erosion going on here, starting right at the top and getting more severe further down the income statement. A $1.3 billion goodwill reduction took down the net income line four quarters ago, and that heavy hit will now roll off of the trailing-12-month figures. Much of the operational slip can be explained by substantially larger investments into R&D quarter by quarter.

Margins

12/2005

3/2006

6/2006

9/2006

12/2006

3/2007

Gross

68.3%

68.2%

67.7%

67.3%

67.3%

66.9%

Operating

21.9%

20.3%

18.2%

16.2%

13.5%

12.1%

Net

17.0%

16.1%

(41.8%)

(42.4%)

(43.5%)

(42.8%)

FCF/Revenue

26.4%

25.4%

29.0%

29.1%

28.4%

27.6%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
I think I mentioned a buying opportunity after the last report. That advice won't be repeated today, as the stock price has risen almost 30% since then. Apart from a 3% Monday drop, these shares are about as expensive now, dollar-for-dollar, as they've ever been after the dot-com bubble went "pop." Looks like quiet confidence and steady results can attract buyers, too.

It's not a sector effect, either. Cisco and Alcatel-Lucent (NYSE:ALU) are up just 12% over the same period, and Nortel is down 6%, with the S&P 500 gaining about 5%.

Juniper is a more tightly focused business than its larger rivals, with no designs on stretch markets like telecom infrastructure or set-top cable boxes. It will probably always play second or third fiddle even in the narrowly defined data networking market in which it operates, but that might not be a bad part to play these days. There's plenty of global demand to feed a handful of equipment providers.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, as tempting as some of them might be. You can check out Anders' holdings if you like, and Foolish disclosure helps you focus on the task at hand.