What To Expect From Juniper Networks’ First Quarter Earnings

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Juniper Networks (NYSE:JNPR) is scheduled to announce its first quarter results on May 1. Juniper’s core revenues have declined in recent years, while product gross margins have also compressed. Router revenues fell 7% through 2017 to $2.2 billion, while network security revenues fell 8% to $293 million. Network Switches was the only product revenue stream with positive growth through the year, with a 12% increase in revenues to $963 million. However, in Q4 Network Switches revenues also fell 7% on a y-o-y basis. Moreover, product gross margins fell by around 150 basis points through the year.

For the March quarter, we expect Juniper’s revenues to decline nearly 5% to $1.1 billion, while the operating margin (non-GAAP) is expected to be around 10 points lower at 12.5%. Resulting net income is also expected to be over 40% lower on a y-o-y basis to just over $100 million for the quarter. In order to reward shareholders, Juniper repurchased 26 million shares for about $720 million through 2017, compared to 13.5 million shares for $313 million in 2016. Management further indicated the company’s intent to enter into an accelerated share repurchase program worth $750 million in the first quarter of 2018, while also increasing cash dividends. Resulting earnings per share is expected to be around 30-35% lower on a y-o-y basis to 30-31 cents a share. We have summarized our expectations on our interactive dashboard platform. If you disagree with our forecasts, you can change the key drivers including revenue growth by segment and margins for Juniper to gauge how changes will impact its EPs for the quarter.

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