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Juniper (JNPR) Q1 Earnings & Revenues Lag Estimates, Down Y/Y
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Juniper Networks, Inc. (JNPR - Free Report) reported unimpressive first-quarter 2020 results, with the bottom and the top line missing their respective Zacks Consensus Estimate and declining year over year.
Of the top 10 customers for the quarter, four were Cloud, five were Service Provider and one was an Enterprise. While this Sunnyvale, CA-based company is optimistic about long-term prospects, it has withdrawn the previously-announced commentary for 2020 because it cannot predict the specific extent of the impact of COVID-19 on financial results.
Net Income
On a GAAP basis, net income in the March quarter declined to $20.4 million or 6 cents per share from $31.1 million or 9 cents per share in the prior-year quarter. The downtick was primarily caused by lower operating income and other net expenses.
Quarterly non-GAAP net income was $77.2 million or 23 cents per share compared with $92.7 million or 26 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by 2 cents.
Juniper Networks, Inc. Price, Consensus and EPS Surprise
First-quarter total net revenues amounted to $998 million (slightly below the low end of the company’s guidance) compared with $1,001.7 million reported in the year-ago quarter. Revenues were impacted due to supply chain challenges related to COVID-19, which affected customer lead time and Juniper’s ability to recognize revenues in the quarter, particularly within the service provider business. However, orders increased 10% year over year and improved across each of the core industry verticals. The top line lagged the consensus estimate of $1,006 million.
Product revenues (comprising Routing, Switching and Security and contributing 61% to total net revenues) in the quarter dropped 1.6% year over year to $608.8 million. Routing revenues were impacted by supply constraints related to the pandemic. Service revenues (contributing 39% to total net revenues) inched up 1.6% to $389.2 million. Juniper saw a solid performance from its software offerings where software revenues were almost 11% of total revenues and up 9% year over year.
By vertical, net revenues in Cloud business increased 17.4% year over year to $261.9 million. Juniper saw momentum within its Cloud customers’ wide area network particularly for some of its switching products, while the cloud routing business also witnessed double-digit growth year over year. Order trends remained healthy as it saw improved momentum across multiple hyperscale accounts and continued strength with its Tier-2 customers.
Net revenues in Service Provider were down 13.8% to $375.5 million. This business was most affected by COVID-19 related supply chain challenges. Orders increased 4% year over year, which represents the first increase since 2017. The order strength is attributable to Juniper’s diversification efforts across customers and products over the last few years. Net revenues in Enterprise increased to $360.6 million from $343 million, driven by growth in the company’s Campus and datacenter offerings.
Region-wise, net revenues declined to $255 million from $286.2 million in the year-ago quarter in Europe, the Middle East, and Africa. Quarterly revenues in the Americas increased 6.6% year over year to $579.5 million. In Asia-Pacific, net revenues fell 4.9% to $163.5 million.
Other Details
Gross profit came in at $579.3 million compared with $582.3 million in the year-ago quarter. Total operating expenses increased from $539.6 million to $539.9 million in the prior-year quarter. Operating income was $39.4 million compared with $42.7 million in the year-ago quarter. Non-GAAP operating income declined to $105.5 million from $112.5 million, with a margin of 10.6% and 11.2%, respectively.
Juniper stated that its board of directors has approved a dividend of 20 cents per share, payable on Jun 22 to shareholders on record as of Jun 1.
Cash Flow & Liquidity
In the first quarter, Juniper generated $272.2 million of net cash from operations compared with $159.4 million in the year-ago quarter.
As of Mar 31, the computer network equipment maker had $1,398.6 million in cash and equivalents with $1,712.9 million of long-term debt.
Q2 Outlook
Juniper provided its guidance for the second quarter of 2020. It expects revenues of $1,060 million (+/- $50 million). Non-GAAP gross margin is anticipated to be 59.5% (+/- 1%). Non-GAAP operating expenses are expected to be $480 million (+/- $5 million).
The company estimates non-GAAP operating margin to be almost 14% at the midpoint of revenue guidance. Non-GAAP net income is expected to be 34 cents per share (+/- 5 cents), assuming a share count of around 332 million.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Turtle Beach has a trailing four-quarter positive earnings surprise of 112.5%, on average.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Zacks Top 10 Stocks for 2020
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Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Juniper (JNPR) Q1 Earnings & Revenues Lag Estimates, Down Y/Y
Juniper Networks, Inc. (JNPR - Free Report) reported unimpressive first-quarter 2020 results, with the bottom and the top line missing their respective Zacks Consensus Estimate and declining year over year.
Of the top 10 customers for the quarter, four were Cloud, five were Service Provider and one was an Enterprise. While this Sunnyvale, CA-based company is optimistic about long-term prospects, it has withdrawn the previously-announced commentary for 2020 because it cannot predict the specific extent of the impact of COVID-19 on financial results.
Net Income
On a GAAP basis, net income in the March quarter declined to $20.4 million or 6 cents per share from $31.1 million or 9 cents per share in the prior-year quarter. The downtick was primarily caused by lower operating income and other net expenses.
Quarterly non-GAAP net income was $77.2 million or 23 cents per share compared with $92.7 million or 26 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by 2 cents.
Juniper Networks, Inc. Price, Consensus and EPS Surprise
Juniper Networks, Inc. price-consensus-eps-surprise-chart | Juniper Networks, Inc. Quote
Revenues
First-quarter total net revenues amounted to $998 million (slightly below the low end of the company’s guidance) compared with $1,001.7 million reported in the year-ago quarter. Revenues were impacted due to supply chain challenges related to COVID-19, which affected customer lead time and Juniper’s ability to recognize revenues in the quarter, particularly within the service provider business. However, orders increased 10% year over year and improved across each of the core industry verticals. The top line lagged the consensus estimate of $1,006 million.
Product revenues (comprising Routing, Switching and Security and contributing 61% to total net revenues) in the quarter dropped 1.6% year over year to $608.8 million. Routing revenues were impacted by supply constraints related to the pandemic. Service revenues (contributing 39% to total net revenues) inched up 1.6% to $389.2 million. Juniper saw a solid performance from its software offerings where software revenues were almost 11% of total revenues and up 9% year over year.
By vertical, net revenues in Cloud business increased 17.4% year over year to $261.9 million. Juniper saw momentum within its Cloud customers’ wide area network particularly for some of its switching products, while the cloud routing business also witnessed double-digit growth year over year. Order trends remained healthy as it saw improved momentum across multiple hyperscale accounts and continued strength with its Tier-2 customers.
Net revenues in Service Provider were down 13.8% to $375.5 million. This business was most affected by COVID-19 related supply chain challenges. Orders increased 4% year over year, which represents the first increase since 2017. The order strength is attributable to Juniper’s diversification efforts across customers and products over the last few years. Net revenues in Enterprise increased to $360.6 million from $343 million, driven by growth in the company’s Campus and datacenter offerings.
Region-wise, net revenues declined to $255 million from $286.2 million in the year-ago quarter in Europe, the Middle East, and Africa. Quarterly revenues in the Americas increased 6.6% year over year to $579.5 million. In Asia-Pacific, net revenues fell 4.9% to $163.5 million.
Other Details
Gross profit came in at $579.3 million compared with $582.3 million in the year-ago quarter. Total operating expenses increased from $539.6 million to $539.9 million in the prior-year quarter. Operating income was $39.4 million compared with $42.7 million in the year-ago quarter. Non-GAAP operating income declined to $105.5 million from $112.5 million, with a margin of 10.6% and 11.2%, respectively.
Juniper stated that its board of directors has approved a dividend of 20 cents per share, payable on Jun 22 to shareholders on record as of Jun 1.
Cash Flow & Liquidity
In the first quarter, Juniper generated $272.2 million of net cash from operations compared with $159.4 million in the year-ago quarter.
As of Mar 31, the computer network equipment maker had $1,398.6 million in cash and equivalents with $1,712.9 million of long-term debt.
Q2 Outlook
Juniper provided its guidance for the second quarter of 2020. It expects revenues of $1,060 million (+/- $50 million). Non-GAAP gross margin is anticipated to be 59.5% (+/- 1%). Non-GAAP operating expenses are expected to be $480 million (+/- $5 million).
The company estimates non-GAAP operating margin to be almost 14% at the midpoint of revenue guidance. Non-GAAP net income is expected to be 34 cents per share (+/- 5 cents), assuming a share count of around 332 million.
Zacks Rank & Stocks to Consider
Juniper currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the industry are Ooma, Inc. (OOMA - Free Report) , Turtle Beach Corporation (HEAR - Free Report) and Plantronics, Inc. . While Ooma sports a Zacks Rank #1 (Strong Buy), Turtle Beach and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Turtle Beach has a trailing four-quarter positive earnings surprise of 112.5%, on average.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>