Juniper Networks (JNPR) Tops Q4 EPS by 1c, Slight Beat on Revenues; Offers 1Q18 EPS/Revenue Guidance Below Consensus
Juniper Networks (NYSE: JNPR) reported Q4 EPS of $0.53, $0.01 better than the analyst estimate of $0.52. Revenue for the quarter came in at $1.24 billion versus the consensus estimate of $1.23 billion.
Outlook
The first quarter revenue outlook reflects ongoing deployment delays as Juniper expects its large cloud customers to continue their architectural transition, which is expected to result in below normal seasonality. The Company remains confident in its competitive position and strong relationship with these strategic customers.
Beyond the first quarter, Juniper expects revenue to grow on a sequential basis and return to year-on-year growth by the end of the year.
The Company expects gross margins for the quarter to remain under pressure, due to lower volume and product mix, resulting from the architectural shifts discussed above. The Company expects full year margins to improve directionally from Q1'18 levels.
Juniper expects to manage operating expenses prudently and to increase operational efficiencies, both in the first quarter and throughout the year.
As a result of the Tax Cuts and Jobs Act, the Company plans to repatriate approximately $3 billion. Juniper expects the new territorial tax system to provide lower cost access to nearly all global free cash flow on an ongoing basis. The Company intends to use the repatriated cash to invest in its business, support value-enhancing M&A, and fund its return of capital to shareholders.
Juniper's guidance for the quarter ending March 31, 2018 is as follows:
- Revenues will be approximately $1,050 million, plus or minus $30 million.
- Non-GAAP gross margin will be approximately 58.0%, plus or minus 1.0%.
- Non-GAAP operating expenses will be approximately $485 million, plus or minus $5 million.
- Non-GAAP operating margin will be approximately 12.0% at the midpoint of revenue guidance.
- Non-GAAP tax rate will be approximately 21.0%.
Fourth Quarter 2017 Financial Performance
- Net revenues were $1,239.5 million, a decrease of 11% year-over-year and 1% sequentially.
- GAAP operating margin was 16.4%, a decrease from 20.7% in the fourth quarter of 2016, and a decrease from 18.4% in the third quarter of 2017.
- Non-GAAP operating margin was 22.7%, a decrease from 26.5% in the fourth quarter of 2016, and a decrease from 23.5% in the third quarter of 2017.
- GAAP net loss was $148.1 million, a decrease of 178% year-over-year and 189% sequentially, resulting in diluted loss per share of $0.40. GAAP net loss was primarily due to the Tax Cuts and Jobs Act, which resulted in an estimated $289.5 million of tax expense.
- Non-GAAP net income was $199.4 million, a decrease of 22% year-over-year and 6% sequentially, resulting in diluted earnings per share of $0.53.
GUIDANCE:
Juniper Networks sees Q1 2018 EPS of $0.22-$0.28, versus the consensus of $0.52. Juniper Networks sees Q1 2018 revenue of $1.02-1.08 billion, versus the consensus of $1.23 billion.
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