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Juniper (JNPR) Q4 Earnings Match Estimates, Revenues Rise Y/Y
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Juniper Networks, Inc. (JNPR - Free Report) reported healthy fourth-quarter 2019 results wherein the top line increased year over year and surpassed the Zacks Consensus Estimate.
The company returned to year-over-year growth during the reported quarter and saw encouraging trends across various areas of its business. These include record Enterprise sales, double-digit year-over-year growth in Cloud, solid momentum in Mist, and strength in its services organization.
Net Income
On a GAAP basis, net income for the December quarter declined to $168.4 million or 49 cents per share from $192.2 million or 55 cents per share in the prior-year quarter, primarily due to lower operating income. For 2019, net income was $345 million or 99 cents per share compared with $566.9 million or $1.60 per share in 2018.
Quarterly non-GAAP net income was $198.7 million or 58 cents per share compared with $205.7 million or 59 cents per share reported a year ago. The bottom line matched the Zacks Consensus Estimate.
Juniper Networks, Inc. Price, Consensus and EPS Surprise
Fourth-quarter total net revenues were $1,208.1 million (above the midpoint of the company’s guidance) compared with $1,181 million reported in the year-ago quarter. The improvement was driven by the Cloud and Enterprise verticals, which more than offset anticipated weakness within its Service Provider business. The top line surpassed the consensus estimate of $1,190 million. For 2019, revenues declined 4.3% year over year to $4,445.4 million.
Product revenues (comprising Routing, Switching and Security, and accounting for 65.5% of total net revenues) for the quarter increased 2% year over year to $791.9 million backed by strong demand for switching products. Service revenues (accounting for 34.5% of total net revenues) were up 2.9% to $416.2 million. Juniper’s services team continues to execute extremely well with improved attach rates and renewals.
By vertical, net revenues from Cloud business increased 17.8% year over year to $279.8 million, primarily driven by routing and services. Net revenues from Service Provider unit were down 4.6% to $492.5 million. This reflects the ongoing challenges many of the company’s carrier customers are facing. Net revenues from Enterprise business increased to $435.8 million from $427.1 million, driven by switching.
Region wise, net revenues declined to $335.7 million from $344 million in Europe, Middle East, and Africa. Quarterly revenues in the Americas increased 6.6% year over year to $676.8 million. For Asia Pacific, net revenues decreased 3.2% to $195.6 million.
Other Details
Gross profit came in at $719.3 million compared with $710.9 million in the year-ago quarter supported by higher revenues. Total operating expenses increased from $514.1 million to $540.7 million mainly due to rise in sales & marketing, and R&D costs. Operating income was $178.6 million compared with $196.8 million. Non-GAAP operating income declined to $244.7 million from $248.7 million, with margin of 20.3% and 21.1%, respectively.
Concurrent with the results, Juniper communicated that its board of directors has approved a 5% increase in its quarterly cash dividend to 20 cents per share. The distribution is payable on Mar 23, 2020 to shareholders as of Mar 2, 2020.
Cash Flow & Liquidity
In 2019, Juniper generated $528.9 million of net cash from operations compared with $861.1 million in 2018. As of Dec 31, 2019, the computer network equipment maker had $1,215.8 million in cash and equivalents with $1,683.9 million of long-term debt compared with the respective tallies of $2,489 million and $1,789.1 million a year ago.
Q1 Outlook
Juniper has provided its guidance for first-quarter 2020. It expects revenues of $1,030 million (+/- $30 million). Non-GAAP gross margin is anticipated to be around 59.5% (+/- 1%). Non-GAAP operating expenses are expected to be nearly $495 million (+/- $5 million).
The company estimates non-GAAP operating margin to be around 11.5% at the midpoint of revenue guidance. Non-GAAP net income is expected to be approximately 27 cents per share (+/- 3 cents), assuming a share count of almost 340 million. For 2020, it expects a non-GAAP tax rate on worldwide earnings to be 19% (+/- 1%).
Zacks Rank & Stocks to Consider
Juniper currently has a Zacks Rank #4 (Sell). A few better-ranked stocks in the broader industry are Splunk Inc. , Cloudera, Inc. and Chegg, Inc. (CHGG - Free Report) . While Splunk sports a Zacks Rank #1 (Strong Buy), Cloudera and Chegg carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Splunk topped earnings estimates in the trailing four quarters, the surprise being 74.3%, on average.
Cloudera surpassed earnings estimates thrice in the trailing four quarters, the positive surprise being 36.1%, on average.
Chegg topped earnings estimates in the trailing four quarters, the beat being 49.4%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Juniper (JNPR) Q4 Earnings Match Estimates, Revenues Rise Y/Y
Juniper Networks, Inc. (JNPR - Free Report) reported healthy fourth-quarter 2019 results wherein the top line increased year over year and surpassed the Zacks Consensus Estimate.
The company returned to year-over-year growth during the reported quarter and saw encouraging trends across various areas of its business. These include record Enterprise sales, double-digit year-over-year growth in Cloud, solid momentum in Mist, and strength in its services organization.
Net Income
On a GAAP basis, net income for the December quarter declined to $168.4 million or 49 cents per share from $192.2 million or 55 cents per share in the prior-year quarter, primarily due to lower operating income. For 2019, net income was $345 million or 99 cents per share compared with $566.9 million or $1.60 per share in 2018.
Quarterly non-GAAP net income was $198.7 million or 58 cents per share compared with $205.7 million or 59 cents per share reported a year ago. The bottom line matched the Zacks Consensus Estimate.
Juniper Networks, Inc. Price, Consensus and EPS Surprise
Juniper Networks, Inc. price-consensus-eps-surprise-chart | Juniper Networks, Inc. Quote
Revenues
Fourth-quarter total net revenues were $1,208.1 million (above the midpoint of the company’s guidance) compared with $1,181 million reported in the year-ago quarter. The improvement was driven by the Cloud and Enterprise verticals, which more than offset anticipated weakness within its Service Provider business. The top line surpassed the consensus estimate of $1,190 million. For 2019, revenues declined 4.3% year over year to $4,445.4 million.
Product revenues (comprising Routing, Switching and Security, and accounting for 65.5% of total net revenues) for the quarter increased 2% year over year to $791.9 million backed by strong demand for switching products. Service revenues (accounting for 34.5% of total net revenues) were up 2.9% to $416.2 million. Juniper’s services team continues to execute extremely well with improved attach rates and renewals.
By vertical, net revenues from Cloud business increased 17.8% year over year to $279.8 million, primarily driven by routing and services. Net revenues from Service Provider unit were down 4.6% to $492.5 million. This reflects the ongoing challenges many of the company’s carrier customers are facing. Net revenues from Enterprise business increased to $435.8 million from $427.1 million, driven by switching.
Region wise, net revenues declined to $335.7 million from $344 million in Europe, Middle East, and Africa. Quarterly revenues in the Americas increased 6.6% year over year to $676.8 million. For Asia Pacific, net revenues decreased 3.2% to $195.6 million.
Other Details
Gross profit came in at $719.3 million compared with $710.9 million in the year-ago quarter supported by higher revenues. Total operating expenses increased from $514.1 million to $540.7 million mainly due to rise in sales & marketing, and R&D costs. Operating income was $178.6 million compared with $196.8 million. Non-GAAP operating income declined to $244.7 million from $248.7 million, with margin of 20.3% and 21.1%, respectively.
Concurrent with the results, Juniper communicated that its board of directors has approved a 5% increase in its quarterly cash dividend to 20 cents per share. The distribution is payable on Mar 23, 2020 to shareholders as of Mar 2, 2020.
Cash Flow & Liquidity
In 2019, Juniper generated $528.9 million of net cash from operations compared with $861.1 million in 2018. As of Dec 31, 2019, the computer network equipment maker had $1,215.8 million in cash and equivalents with $1,683.9 million of long-term debt compared with the respective tallies of $2,489 million and $1,789.1 million a year ago.
Q1 Outlook
Juniper has provided its guidance for first-quarter 2020. It expects revenues of $1,030 million (+/- $30 million). Non-GAAP gross margin is anticipated to be around 59.5% (+/- 1%). Non-GAAP operating expenses are expected to be nearly $495 million (+/- $5 million).
The company estimates non-GAAP operating margin to be around 11.5% at the midpoint of revenue guidance. Non-GAAP net income is expected to be approximately 27 cents per share (+/- 3 cents), assuming a share count of almost 340 million. For 2020, it expects a non-GAAP tax rate on worldwide earnings to be 19% (+/- 1%).
Zacks Rank & Stocks to Consider
Juniper currently has a Zacks Rank #4 (Sell). A few better-ranked stocks in the broader industry are Splunk Inc. , Cloudera, Inc. and Chegg, Inc. (CHGG - Free Report) . While Splunk sports a Zacks Rank #1 (Strong Buy), Cloudera and Chegg carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Splunk topped earnings estimates in the trailing four quarters, the surprise being 74.3%, on average.
Cloudera surpassed earnings estimates thrice in the trailing four quarters, the positive surprise being 36.1%, on average.
Chegg topped earnings estimates in the trailing four quarters, the beat being 49.4%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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