Why Juniper Networks Is a BuyJNPR) announced second quarter ended June 30, 2016 total revenue of $1.22 billion, same as net revenue declared during the same period last year. However, total revenue for the quarter grew 11 percent sequentially over first quarter of 2016. Going forward, the company estimates third quarter of 2016 total revenue to be in the range of $1.22 billion to $1.28 billion.
A closer look
Juniper declared second quarter of 2016 non-GAAP net income of $191.6 million or $0.50 per adjusted diluted share, down 8 percent year-over-year from $208.8 million or $0.53 per adjusted diluted share in second quarter of 2015 but, grew 35 percent sequentially from $142.2 million or $0.37 per adjusted diluted share in first quarter of 2016.
The global networking company reported continued sequential and year-over-year growths in both its top and bottom lines primarily driven by the company’s superior diversification plan coupled with a highly differentiated portfolio of technologically advanced networking products.
The international network-equipment manufacturing company illustrated highly diversified sources for its top line growth contribution which again signifies notable customer demand for the company’s advanced networking solutions.
Juniper stock declined 12% recently, after the networking company declared a weaker outlook for the existing quarter that missed the key analyst’s forecasts.
However, the company shares gained about 22% since last year, whereas the S&P 500 index fell approximately 7%.
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The networking gear manufacturing company is expected to continue to suffer margin losses amid a tough global operating environment with weak customer demand and rising promotional expenditures to enhance sales.
During the quarter, Juniper reported $354 million of operating cash flows, year-over-year increase of $91 million, and a sequential growth of $182 million. Further, the company bought back $126 million total shares and offered $38 million of key dividends which is in line with its continued commitment to deliver attractive shareholder returns. Moreover, Juniper has returned nearly $3.91 billion of total capital to the key stakeholders which was very close to its commitment of returning $4.1 billion by the fiscal year ending 2016.
Key customer wins
Juniper recently declared that it will be a key technology partner of Verizon Enterprise Solutions with former’s cloud CPE solutions acting as an initial growth step for the Virtual Network Services of Verizon and allowing wider choices for selecting the best networking solutions in accordance with their requirements.
Juniper seems keen on expanding its networking solutions portfolio by strategically partnering with other networking giants such as Verizon, allowing it to deliver sustainable top line growth while offering attractive shareholder returns in the form of dividends and strategic share repurchases.
CyberAgent, Inc., which is a key internet services provider, recently announced to have already selected Juniper’s EX3300 Ethernet Switches, QFX5100 Director and MX480 3D Universal Edge Routers for driving the growth of its traditional infrastructure into a cloud-based advanced network. The unique partnership would significantly enable Juniper’s advanced cloud-based solutions to deliver superior agility and performance for strategically simplifying the control of its vast service resources while supporting more than 40 million users throughout the organization’s key growth platforms and businesses.
Also, the eBay Classifieds Group has recently selected Juniper’s Contrail Networking feature to develop hugely scalable and automated virtual overlay networks for allowing its customers to simply purchase, trade, sell and connect.
The impressive customer traction for Juniper’s advanced networking solutions signifies the robust company’s growth strategy focused on offering next-generation networking solutions to its customers while delivering attractive shareholder returns.
Overall, the investors are advised to “Buy” equity in Juniper Networks, Inc. considering the company’s significant near-term and longer term growth prospects being supported by a solid balance sheet with an impressive total cash position of $2.34 billion against smaller total debt position of $2.13 billion only, encouraging the company to make future growth investments while delivering attractive shareholder returns. The profit margin of 12.83% also seems impressive. The PEG ratio of 0.92 depicts satisfactory company growth.
Published on Aug 26, 2016By Vinay Singh