What To Expect From Juniper Through 2018 After Mixed Q1?

by Trefis Team
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Juniper Networks (NYSE:JNPR) recently announced its first quarter results, reporting an 11% decline in net revenues. Juniper’s core revenues have declined in recent years, while product gross margins have also compressed. This trend continued in the March quarter, with router revenues falling 21% through the quarter to $408 million. Additionally, network switches revenues fell 5% to $230 million. On a positive note, security revenues picked up 11% to $73 million. In line with expectations, non-GAAP operating margin fell 10 percentage points to 12.3% for the quarter, with both net income and EPS falling 40-45% over the comparable prior year period.

For the current quarter, Juniper’s revenues are expected to decline 4% to $1.2 billion, while the operating margin (non-GAAP) is expected to be around 3 points lower at 17.5%. Resulting net income per share is forecast to be only around 3-4% lower on a y-o-y basis to $0.44 per share for the quarter. For the full year, we forecast routing revenues to continue to decline considerably, with other product streams also witnessing modest declines. The company entered into an accelerated share repurchase program worth $750 million through the March quarter, while also increasing cash dividends. This should help in year-over-year EPS comparisons through 2018. We have summarized our full year 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 year.

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