Will Juniper’s Revenue Declines Continue In The Second Half Of 2018?
Juniper Networks (NYSE:JNPR) recently announced its second quarter results, reporting an 8% decline in net revenues to $1.2 billion. Revenues were slightly higher than the midpoint of the guided range at the end of the previous quarter. While Juniper’s core revenues have continued to decline in recent years and through the current year, growth in services revenues has partially offset the fall in revenues. However, in the June ended quarter, services revenues also fell 3% to $379 million. Juniper’s non-GAAP operating margin stood at 18.5% for the quarter, which a percentage point higher than the mod-point of the guided range. As a result, both non-GAAP net income and non-GAAP diluted EPS were over 10% higher than expectations at $170 million and $0.44, respectively.
For the latter half of the year, we forecast Juniper’s net revenue to remain subdued. However, the company’s management expects to resume revenue growth from the fourth quarter. Even with revenue growth through Q4, full year revenues should remain lower over 2017 levels. We forecast core router and switching revenues to be around 8% lower on a y-o-y basis to $2 billion and $900 million, respectively. On the other hand, we forecast network security and services revenues for the full year to be up in the low single digits to $300 million and $1.6 billion, respectively. In line with recent trends, we expect the adjusted operating margin to continue to be around 3-4 points lower at 24-25% through the end of the year. Resulting net income per share is forecast to be over 15% lower on a y-o-y basis to $1.75 per share for the year. We have summarized our expectations on our interactive full year Juniper results forecast dashboard. 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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