UPDATE 4-Juniper sales miss Street, shares slide

* Q3 EPS excluding items $0.32, in line with expectations

* Q3 revenue $1.01 bln vs Street view of $1.02 bln

* Sees Q4 rev $1.12 bln vs Street's $1.10 bln

* Shares down 3.4 percent (Updates with analyst's comment, latest share move)

By Ritsuko Ando

NEW YORK, Oct 19 (Reuters) - Juniper Networks' (JNPR.N) quarterly revenue slightly missed Wall Street's expectations, disappointing investors who had hoped for stronger signs of a recovery in network spending.

But Juniper, which competes with much bigger Cisco Systems Inc (CSCO.O) in selling routers and switches, gave an upbeat outlook for the current quarter, helping to limit a sell-off in the shares.

"There was certainly a surprise that they didn't post an upside on the topline. But they were pretty clear that the underlying demand and orders were actually pretty healthy," said Signal Hill analyst Erik Suppiger.

Juniper reported third-quarter revenue of $1.01 billion. That was just a sliver below the market's forecast of $1.02 billion, according to Thomson Reuters I/B/E/S, but it was still a disappointment given Wall Street's high expectations.

The shares briefly fell more than 10 percent after-hours, though they recovered slightly after Juniper said it was on track for revenue growth of 20 percent or higher for the full year, and forecast fourth-quarter revenue of $1.12 billion, plus or minus $20 million. Analysts expected fourth-quarter revenue of $1.10 billion.

Later in extended trading, the shares were down 3.4 percent at $29.50, compared with their close of $30.54.

They had risen about 20 percent over the past quarter on hopes that an economic recovery was encouraging companies, particularly phone and cable service providers, to spend more on communications gear like switches and routers.

Growing Internet traffic, due to the popularity of online video services, smartphones and new gadgets like tablet computers, are driving demand for advanced network equipment.

Chief Executive Kevin Johnson said the global economic recovery was still patchy and slow, but said he was "very encouraged" by recent discussions with large, service provider customers.

"History shows that U.S. service providers typically spend over half their Capex budgets in the second half of the calendar year," he said on a conference call. "We expect that to be the case again in 2010 and we have significant opportunities in each of the markets we address."

Juniper reported a quarterly net profit of $135 million, or 25 cents per share, up from $84 million, or 16 cents a share, a year earlier. Excluding items, profit was 32 cents a share, matching Wall Street's expectations.

Cisco shares fell 1 percent after-hours to $22.73. The industry leader announces its fiscal first quarter results on Nov. 10. (Reporting by Ritsuko Ando; Editing by Gary Hill, Bernard Orr)