The Zacks Analyst Blog Highlights: eBay, Juniper Networks, Cisco Systems, F5 Networks, Alcatel-Lucent

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Apr 16, 2013, 09:30 ET

CHICAGO, April 16, 2013 /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 eBay Inc. (Nasdaq:EBAY), Juniper Networks Inc. (NYSE:JNPR), Cisco Systems Inc. (Nasdaq:CSCO), F5 Networks Inc. (Nasdaq:FFIV) and Alcatel-Lucent (NYSE:ALU).

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Here are highlights from Monday's Analyst Blog:

eBay Earnings Preview: Will It Miss?

eBay Inc. (Nasdaq:EBAY) is set to report first quarter 2013 results on April17. Last quarter it posted a 4.92% positive surprise. Let's see how things are shaping up for this announcement.

Growth Factors This Past Quarter

eBay'sstrength at PayPal, fast-growing presence in the mobile space and reinvigorated Marketplaces business all led to higher sales growth rates in the fourth quarter of 2012. The continuous introduction of new solutions to enhance the mobile shopping experience and rapid consumer adoption also attributed to higher sales. eBay's mobile business touched $13 billion in 2012 and is expected to generate $20 billion of mobile commerce and payments volume in 2013.

However, the quarter was weak for eBay in terms of margin expansion. We believe that the sale of low-value items and increased expenditure on the launch of various new products will continue to hurt margins.

Earnings Whispers?

Our proven model does not conclusively show that eBay is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: The Most Accurate estimate stands at $0.53 while the Zacks Consensus Estimate is higher at $0.54. That is a difference of -1.85%.

Zacks Rank #3 (Hold): eBay's Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Juniper's T4000 Finds More Takers

Networking giant Juniper Networks Inc. (NYSE:JNPR) recently announced that it has provided telecom company Belgacom Group with its advanced core routing solutions (T4000). The Belgacom Group is the largest telecommunications company in Belgium, which offers fixed line communication, mobile communications and ICT (Information and Communication Technology) services. Financial terms of the deal were kept confidential.

With Juniper's T4000 routers, Belgacom aims at delivering ultra-fast Internet access and bandwidth growth, keeping pace with the growing usage of Internet applications. The advanced core routing solution will enable Belgacom to develop its core networking infrastructure to meet the increasing demand for next generation cloud applications and online videos on smartphones and tablets.

Last month, the China Education and Research Network ('CERNET') deployed Juniper's T4000 routing solution for an undisclosed sum.

The Chinese government and the Chinese Ministry of Education jointly set up a nationwide education and research computer network, the CERNET. The network is constructed and operated by Tsinghua and other leading Chinese universities. CERNET interconnects a number of Chinese Universities, educational institutes and research centers and is dedicated to support the country's higher education institutions.

With Juniper's T4000 routers, CERNET is now delivering ultra-fast broadband services to educational institutions and is helping the government to achieve the objectives of its education Project 211, initiated in 1995. The project was intended to improve the research standards of leading Chinese universities. As many as 20,000,000 students in 2000 universities across China are benefiting from the broadband services.

Juniper's T4000 core routers were introduced as a next iteration of its flagship T-series routers in 2010. The launch of T4000 was made to compete with

Cisco Systems Inc.

's (Nasdaq:

CSCO

) Carrier Routing System 3 (CRS 3). The growing demand for T4000 is evident from the back-to-back deal wins. We also believe that the success of T4000 with CERNET and Belgacom will likely attract similar deals going forward, given the growing demand for fast Internet services.

We remain encouraged by the rapid deployment of Juniper's networking products and services by organizations and government verticals to meet growing business demand. We also appreciate Juniper's continuous efforts to make strategic acquisitions, which enrich its product portfolio.

But stiff competition from F5 Networks Inc. (Nasdaq:FFIV), Cisco and Alcatel-Lucent (NYSE: ALU), strained spending from the telecom companies and macro uncertainty keep us concerned.

Currently, Juniper has a Zacks Rank #4 (Sell).

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