The Zacks Analyst Blog Highlights: Juniper Networks, Intel, Cisco Systems, Hewlett-Packard and Agrium

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Jun 13, 2012, 09:30 ET

CHICAGO, June 13, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Juniper Networks (NYSE:JNPR), Intel Corporation (Nasdaq:INTC), Cisco Systems (Nasdaq:CSCO), Hewlett-Packard Company (NYSE:HPQ) and Agrium Inc. (NYSE:AGU).

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Here are highlights from Tuesday's Analyst Blog:

Juniper Offers Data Center Solutions

Sensing the improvement in demand in the data center segment, networking company Juniper Networks (NYSE:JNPR) has come up with new products to enhance the capabilities of mid-sized data center businesses.

The company has recently announced the launch of Juniper Networks QFX3000-M QFabric System, which helps clients explore the full benefits of the company's QFabric System. Juniper claims that the new version requires 63.0% less space. It will also save additional costs as it reduces cable consumption by 74.0% and power consumption by almost 54.0%.

The company also announced additions to its EX8200 switches portfolio, which is backed by Virtual Chassis technology and helps customers in managing up to four data center cores with a single switch.

New product and technology launches have always been a focus area for Juniper. Apart from traditional networking products and related services, the company is entering the security software segment to diversify its business model and add new revenue streams. The acquisition of Myconos Security is an indication of this strategy, as it will fight against hackers and help the company expand in the security segment.

In a report published by Intel Corporation (Nasdaq:INTC)-acquired IT security company McAfee, the company notes the growing adoption of virtualization, cloud computing technologies and flattened network architectures through next-generation data centers. The company continues to witness lower spending on in-house servers by mid-sized organizations. The company cites the improvement in demand for new services, budgetary constraints, and globalization as the chief factors influencing this.

Further, a survey conducted on 100,000 facilities by a data center dedicated website, datacenterdynamics.com, shows that data center usage is expected to be around 7% in 2012. Moreover, the website has also increased its investment projection from about $30 billion in 2010-11 to $35 billion in 2011-2012.

We believe this is good news for networking companies such as Juniper and Cisco Systems (Nasdaq:CSCO), which are adopting necessary steps to seize this opportunity in the data center business.

Juniper's considerable effort to increase its business volume notwithstanding, the company was able to post just mediocre first quarter results. This was mainly on account of strategic increases in its headcount. However, revenue improved in the EMEA and the Americas, and the company provided impressive second quarter guidance.

Although strategic alliances and new acquisitions are positives for Juniper, stiff competition from industry stalwarts like Cisco Systems Inc. and Hewlett-Packard Company (NYSE:HPQ), coupled with high European exposure, remain headwinds.

Juniper has a Zacks #3 Rank, implying a short-term Hold rating.

Agrium Reveals First Half '12 Outlook

Agrium Inc. (NYSE:AGU) announced its earnings outlook for the first half of 2012. The company expects its earnings for the period to be near or at the top end of its prior guidance range of $5.50 to $6.10 per share, as it benefits from strong global grain prices and tight demand-supply situation of nutrients in the international market.

The company expects second-quarter earnings from continuing operations to be near or at the top end of its previously released guidance range of $4.18 to $4.78 per share. The outlook does not include hedging gains or losses and share-based payments expenses.

The second-quarter 2012 guidance assumes higher nitrogen and potash prices, but lower phosphate prices compared to the same period last year. It has also taken lower wholesale fertilizer sales volumes and lower margins in North America into account.

Last week, Agrium more than doubled its dividend payment to 50 cents per share from 22.5 cents per share, reflecting its confidence in the future outlook. The company remains optimistic of attaining its future objectives as well as providing increased return to shareholders.

Last month, the company released its first-quarter 2012 results. The company's earnings (excluding one-time items other than stock-based compensation expenses) of $1.03 per share exceeded the Zacks Consensus Estimate of $1.00 during the quarter. The reported earnings came in at 97 cents per share, down 11% from $1.09 in the year-ago quarter.

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